1985 Supreme(SC) 78

SUPREME COURT OF INDIA
V.D. TULZAPURKAR, AMARENDRANATH SEN AND D.P. MADON, JJ.
State of Orissa and others, Appellants
Versus
Titaghur Paper Mills Company Limited and another, Respondents.
Civil Appeals Nos. 219 with 220 of 1982, D/- 1-3-1985.
WITH
State of Orissa and others, Appellants
Versus
Mangalji Mulji Khara and others, Respondents.
Bamboo contract is not a lease

Headnote:

Constitution of India, 1950 - Article 226, 245(1), 246(1), 366, 286, 32, 19l(f), 142 - Orissa Sales Tax Act, 1947 - Section 3-B, 5(1), 9, 12(5), 8, 1(3), 4(2), 2(c), 4(3), 5(1) - Orissa Sales Tax Act, 1978 - Indian Easements Act, 1882 - Central Sales Tax Act, 1956 - Government of India Act, 1935 – Section 100(3) - Constitution Act, 1956 - Constitution Act, 1976 - Orissa Sales Tax Act, 1958 - Uttar Pradesh Sales Tax Act, 1948 - Sale of Goods Act, 1930 - Madras General Sales Tax Act, 1939 - Orissa General Clauses Act, 1937 - 2 (27) - Registration Act, 1908 - Transfer of Property Act, 1882 - English Sale of Goods Act of 1893 - Section 62(1) - Sale of Goods Act, 1979 - Section 61 (1) - Orissa Sales Tax Rules, 1947 - Rule 22, 28(2) - Business - Bamboo Contracts - Timber Contracts - Challenging Validity Of Notifications - Government of Orissa in Finance Department issued two Notifications was made in exercise of powers conferred by S. 3-B of the Orissa Act - 209 writ petitions were filed in High Court of Orissa challenging validity of the aforesaid two Notifications and said Entries Nos. 2 and 17 in each of said two Notifications - Petitioners before High Court fell into two categories - First category consisted of those who had entered into agreements with State of Orissa for purpose of felling, cutting, obtaining and removing bamboos from forest areas for purpose of converting bamboo into paper pulp or for purposes connected with manufacture of paper or in any connection incidental therewith - This agreement will be hereinafter referred to as Bamboo Contract - Whether any assessment order was made against Respondent Company in pursuance of said notice or whether further proceedings in pursuance of said notice were stayed by High Court by an interim order - Whether it is a works contract and whether notifications amount to excessive delegation, or whether there has been business of purchase by petitioners or whether there has been restriction on trade and business - Whether a person carried on business in a particular commodity depended upon volume, frequency, continuity and regularity of transactions of purchase and sales in a class of goods, and as these ingredients were not satisfied in the cases before it the transactions were not exigible to sales tax - Whether sales tax or purchase tax, goods at another point in same series of sales or purchases of those goods by successive dealers when those goods are liable to be taxed at a different point in that series - Whether a transaction concerns "goods" or "movable property" or "immovable property - Whether for impugned provisions to apply standing trees or bamboos are to be severed before sale or under contract of sale - Whether time of payment of price or time of taking delivery of standing trees agreed to be severed or bamboos agreed to be severed or both is postponed - Whether a particular contract is a sale or purchase of goods is a question of fact or a question of interpretation of documents and one to be decided by assessing authorities - Whether property trees which were subject-matter of Timber Contracts passed to Respondent Firm while trees were still standing or after they were severed - Whether there was a contract of sale of standing timber and whether under contract the property had passed to appellant or whether property had passed after trees had been felled - Whether Divisional Forest Officer is a dealer within meaning of that term as defined in cl. (c) of S. 2 prior to its being substituted with retrospective effect by Orissa Sales Tax Act, 1979 - Whether sawing of planks and chopping of timber into firewood amounted to manufacture so as to make assessee liable to pay sales tax on manufactured goods – Held, As pointed out Timber Contracts are agreements relating to movables while Bamboo Contract is a grant of an interest in immovable property - Question, therefore, whether there is a works contract or a contract of sale of goods can arise only with respect to Timber Contracts but very meaning of a works contract would show that Timber Contracts cannot be works contracts - Payee of price, namely, Government has not undertaken to do any work or labour - Work or labour under Timber Contracts is to be done by payer of price, namely, forest contractor, that is, respondent Firm - It is respondent Firm which has to enter upon land and to fell standing trees and to remove them - Assuming for sake of argument that Bamboo Contract were a contract relating to movables, same position would apply to it - This contention of respondents, is therefore. without any substance - High Court in so far as it holds impugned provisions to be unconstitutional and ultra vires Orissa Sales Tax Act, 1947, requires to be reversed - This, however, does not mean that writ petitions filed by the respondent Company and respondent firm in High Court should be dismissed because in its writ petitions the respondent Company had prayed for quashing notice, issued against it under Rr. 22 and 28(2) of Orissa Sales Tax Rules, 1947, and respondent Firm in its writ petition had prayed for setting aside assessment order, for period - On findings given by Court said notice must be quashed - So far said assessment order is concerned, as Court have pointed out earlier, it is severable and does not require to be set aside in toto but only in so far as it imposed purchase tax on amounts paid by respondent Firm under the Timber Contracts - Though High Court did not give these consequential reliefs in view of its findings that impugned provisions were invalid, it becomes necessary for Court to do so in order to do complete justice between the parties as Court is entitled to do under Art. 142 of Constitution of India - As real object of State Government in making impugned provisions was to make exigible to purchase tax amounts payable under Bamboo Contracts and Timber Contracts in which object it has failed, in Court opinion, a fair order for costs would be that parties should bear and pay their own costs of these - Order accordingly.