IMPORTANT POINT
In the facts of the case, Adopted son Kanhaya Lal and his transferee man Mohan have no right in the properties bequeathed by Testator Durga Prasad to his wife Smt. Durga under his will dt. 1.11.1917 and thus cannot challenge the Will, gift and settlement made by Smt. Durga in favour of Appellant & Murari Lal Dwivedi.

Headnote:Tamil Nadu General Sales Tax Act-Levy of Tax of the point of 1st sale in the State-Schedule to Act items 151-159-Sale tax payable on all kinds of mineral oils-Explanations I and II-No sales tax on sale of oil from one oil company to another oil company-No sales tax levied on the appellants in respect of sales to Indian Oil Co. paid out of compensation pool-Later three show cause notices issued by respondent to levy sales tax proposing to include in the turnover that amount received by appellants from the Industrial pool account treating the same as first sale price-Tribunal upholding them-Whether correct? (No)-Order of Tribunal set aside, cases remanded to assessing authority for fresh adjudication in accordance with law in the light of objections to be filed on show cause notices-Order accordingly.
Held : It is, however, contended that even if it be assumed that the amount received from the compensation pool would form part of the sale price, but, as the amount is received in connection with the sales made by the appellant to another oil company, namely, IOCL, then, by virtue of Explanation 1 referred to hereinabove, the transaction is not to be regarded as the first sale within the State. The amount received by the appellant as a sale consideration from out of the pool relateable to the said sale would, therefore, not be regarded as part of the taxable turnover at all because it is not deemed to be the first sale in the State, tax being levied only at that point. It seems that the Tribunal has not gone into this aspect. The position in law being thus clear, namely, that any money received either from the Indian Oil Corporation Ltd. or from the compensation pool which is relatable to the sales made by the appellant to IOCL, is not to be included in the taxable turnover as it is not to be regarded as the first sale in the State; therefore, to that extent, no tax can be levied in the hand of the appellant on the amount so received. With this clarification, the assessing authority should now proceed with the case pursuant to the show cause notices which are issued by it. The appellant may, if it so chooses, file its objections to the show cause notices, within eight weeks and the assessing authority will proceed thereafter in the light of the clarification now made. These appeals are disposed of in the aforesaid terms, the order of the Tribunal is set aside and the case is remanded to the assessing authority for fresh adjudication in accordance with law. (Paras 5, 6, 7 and 8)

JUDGMENT

Shah, J.-By judgment and decree dated 18th November, 1983 passed in First Appeal No 276 of 1967, the High Court of Allahabad confirmed the judgment and decree dated 3.7.1967 passed by the IInd Additional Civil Judge, Kanpur in Original Suit No. 66 of 1960.

2. After dismissing the appeal, the High Court vide its order dated 18th November, 1983 granted certificate of leave to appeal to this Court

3. The dispute in this appeal is with regard to properties owned by one Durga Prasad Bagla who was owner of considerable property in the City of Kanpur and carried business in the names of M/ s Durga Prasad Bagla, Kanpur and M/s Harmukh Rai Munna Lal, Delhi. Durga Prasad had third wife Mst. Durgi and that they were having no child. On 01.11.1917, he executed a will in favour of Mst. Durgi. He died on 09.9.1918 and thereafter on 21st December 1918, Mst. Durgi adopted deceased Kanhaiya Lal Bagla (plaintiff no.l) and executed an adoption deed also. It appears that there were differences atter adoption and deceased Kanhaiya Lal Bagla, minor through guardian, natural father filed Original Suit No.232 of 1924 against Mst. Durgi and another in the Court of Civil Judge, Kanpur for declaration that he was the adopted son and also for possession over the disputed properties. The suit was decreed by the trial court. Against that Mst. Durgi preferred first appeal No-502 of 1925 before the High Court of Allahabad. That appeal was allowed and the Court held as under: -

"We accordingly allow this appeal and setting aside the decree of the Court be1ow, grant the plaintiff a declaration that he is the validly adopted son of Durga Prasad but that the estate created under the will, dated the 1st of November, 1917, in favour of Mst. Durgi holds good and the plaintiff will have no right to obtain possession of the estate of the deceased during her lifetime."

4. Thereafter, on 1.11.1956, Durgi executed a Will (Ex.A.13) in favour of defendant No. 1 Brahma Vart Sanatan Dharm Mahamandal, Kanpur in respect of properties Nos.1 and 2 of Schedule C to the plaint. On 31.10.1958 she executed a settlement deed (Ex.A.14) in favour of defendant No.1. On 8.11.1958 she also executed a gift deed Ex.Q.1 in favour of defendant no.3 Murari Lal Dwivedi whom she treated as Dharm Putra. It is stated that Mst. Durgi died on night between 11/12th February, 1960.

5. It is alleged that plaintiff no. 1 Kanhaiya Lal Bagla sold seven annas share in the disputed property to plaintiff no.2 Man Mohan Shukla vide sale deed Ex.27. Thereafter, on 20.4.1960 plaintiffs (Kanhaiya Lal and Man Mohan) filed the present suit for possession of the properties and for a declaration that the will, gift and settlement deeds executed by Mst. Durgi are null and void and that the plaintiffs are owners of the properties of Schedule C" of the plaint and for recovery of mesne profits and possession of the properties mentioned in Schedule A & B of the plaint. The suit was resisted by the defendants and it was contended that adoption deed was fraudulently obtained by the natural father of Kanhaiya Lal Bagla and collaterals of Durga Prasad Bagla. It was also stated that Mst. Durgi became absolute owner of the property in terms of the Will executed by Durga Prasad and the adoption in any case would not divest her of the said property. It was also contended that considering the finding given by the High Court in previous proceedings, there was no question of suit or issue being barred by res judicata. In the alternative, it was stated that if it is held that she was limited owner as alleged, she became absolute owner under Section 14(1) of the Hindu Succession Act, 1956.

6. The Trial Court upheld the contention raised by the plaintiffs and held that there will be bar of res judicata with regard to validity of adoption in view of the earlier litigation; Mst. Durgi had only life estate under the Will and it was not enlarged under Section 14(1) of the Hindu Succession Act into an absolute estate. The

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