Judgment

S. R. DAS CJI.: This is an appeal by special leave against the order of the High Court of Judicature at Nagpur dated June 29, 1954, answering against the appellant certain questions referred to it by the Board of Revenue under S. 23(1) of the Central Provinces and Berar Sales Tax Act, 1947 (hereinafter referred to as "the Act"). The reference arose out of an order of assessment made on the respondent for payment of sales tax for the period June 1, 1947, to November 12, 1947, on a taxable turnover of Rs. 30,067-9-0.

2. The facts leading of to the present appeal may shortly be stated as follows. The respondent deals in matchwood called "sawar" (Bombay Malabaricum). His place of business is situated at Chanda in the erstwhile Central Provinces. In January 1948 the respondent entered into an agreement with the Western India Match Co. Ltd., which is popularly known and will hereinafter be referred to as "WIMCO" for the supply of a minimum quantity of 2,500 tons of sawar logs during the season 1947-48. This agreement is evidenced by WIMCO s letter dated 7-1-1948, accepting and confirming it. Unfortunately that letter, although a part of the record, has not been printed in the Paper Book. It is common ground, however, that the agreement of sale was subject to the conditions appearing in a formal contract in writing dated March 2, 1945, which is said to have been renewed from year to year. It appears that prior to the execution of the last mentioned contract there was another contract between the respondent and WIMCO which was dated October 18, 1940. Evidently that contract was superseded by the later one of March 2, 1945, the terms and conditions whereof were renewed year after year. It is, therefore, not easily intelligible why both the contracts were filed before the Sales Tax authorities and actually mentioned in the first question that was referred to the High Court.

3. Both the contracts have been printed in the Paper Book and reference has been made to some of the terms of both of them in the course of the arguments before us. The reason for referring to the terms of the earlier contract is presumably to emphasise the variation in the language used in the corresponding provisions of the later contract as indicative of a definite change in the intention of the parties. It is, therefore, as well that the relevant clauses of both the contracts should be set out here for properly following the arguments advanced on both sides.

4. Reference may first be made to the earlier contract dated October 18, 1940. Clause 1 sets out the specifications, that is to say, the dimensions and quality of the logs to be delivered under the contract which need not be reproduced here. The other material clauses, omitting the unnecessary portions thereof, may now be set out:-

"2. The Contractor agrees that any logs supplied by him which do not conform with the specification herein shall not be accepted or paid for by the company and he the contractor undertakes to remove all logs so rejected at his own expense from the Company s premises within fifteen days after date of notice to him or his representative from the Company so to remove such logs. Should the Contractor fail to remove such logs from the Company s premises within the period stipulated it is hereby mutually agreed that such failure shall be construed as being the Contractor s consent to relinquish all claims whatsoever to such rejected logs, and the Contractor agrees to such logs thereupon becoming the property of the company and that the contractor shall have no claim whatsoever upon the company for payment either in respect of the supply by him of such rejected logs or arising out of the disposal by the Company of such logs."

"3. The said goods shall be delivered at Ambernath in the quantities and at the times hereinafter mentioned, i.e.

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"4. The goods to be supplied under this Contract shall be despatched by the