Judgment

KRISHNA IYER, J.:- The State of Madhya Pradesh, blessed with abundant forest wealth, whose exploitation, for reasons best known to that government, was left in part to the private sector, viz., the respondent, Orient paper Mills, which is the appellant in this appeal by certificate, The subject-matter of this litigation, however, is the competency to collect sales tax from the respondent for the bamboo and salai wood extracted by it, under a transaction relating to some government forests in Vindhya Pradesh which, on States reorganisation in 1956, became part of madhya Pradesh. The transaction itself was dressed up as a lease-deed executed by the then State of Vindhya Pradesh on August 4, 1956 in favour of Orient Paper Mills, the respondent herein. At that time no sales tax could be levied under the law from the forest department of the appellant State or the respondent mills. However, on April 1, 1959 the M. p. General Sales Tax Act, 1958, (hereinafter referred to acronymically as MGST Act) came into force. On the footing that the Forest Department was a dealer it got itself registered as such, under the sales tax law, on November 3, 1962. The respondent, of course, is a