Judgment

R. M. SAHAI, J.:- The short and the only question of law that survives for consideration in these appeals directed against the judgment and order of the High Court of Karnataka is whether rubber sheets of various grades supplied by the State of Karnataka or the Karnataka Forest Plantation Corporation to the private limited companies were Forest Produce within the meaning of the Karnataka Forest Act, 1963 (hereinafter referred to as, the Act) and hence liable to payment of forest development tax under S. 98A thereof.

Even though validity of sub-sec. (1) of S. 101A, which enabled the State Government to grant or supply forest produce to any person on payment of seigniorage value as may be fixed by the Chief Conservator of Forest was challenged, it does not appear to have been pressed in the High Court either before the learned single Judge or the Division Bench nor was it pressed even, in this Court to support the order of the High Court. The dispute, thus, centres round the question whether rubber sheets could be regarded as forest produce. It may further not be out of place to mention that the definition of Forest Produce in the Act was amended in 1989 and rubber latex was added as one of the items in it. But the learned counsel for the State did not rely on the amended definition as clarificatory of what was included earlier. He based his submission, rather on claim that the word caoutchouc was wide enough to include rubber sheets.

2. The respondent, a private limited company, negotiated with the State of Karnataka in 1979 for supply of 60 tonnes of natural rubber of grade RMA I to V per month for a period of five years. A year later State Forest Corporation was constituted. The State, therefore, transferred the liability of supply of the quota of rubber to the Corporation. In the meantime the Chief Conservator of Forest issued notification fixing seigniorage on raw smoked rubber. The State Government informed the company, that the supply of rubber from 9-1-1981 onwards would be at the rate mentioned in the orders made by the Chief Conservator of Forests under S. 101 A of the Act. The company challenged that fixation of the seigniorage by the Chief Conservator of Forests by a writ petition filed in the High Court. The writ petition was allowed by the learned single Judge and it was held that the natural rubber, which has been agreed to be purchased by the company from the Corporation or the State, being in the shape of RMA sheets, was not forest produce. While the State filed appeal against that order of the single Judge, the company filed writ petition for refund of the amount paid by it. Since the controversy in the appeal and the writ petition was the same, the Division Bench decided both, the writ petition and appeal, by a common order, agreeing with the learned single Judge that latex, which is the natural produce, hardened by application of the sulphuric acid and given the shape or form of sheets and thereafter dried with the help of smoke and graded into grades of I to V could not be treated as forest produce, for the process applied resulted in bringing out a commodity which was different from latex, and therefore, no tax could be levied on it.

3. Caoutchouc is included as one of the forest produce under sub-sec. (7) of S. 2 of the Karnataka Forest, Act. In Chambers English Dictionary, caoutchouc is defined as India-rubber, gum-elastic; the latex of rubber trees. In Random House Dictionary, rubber is defined as India-rubber, natural rubber, gum-elastic caoutchouc - a highly elastic, light cream or dark amber coloured, solid substance polymerized by the drying and Coagulation of the latex or milky juice of rubber trees and plants. caoutchouc is described in Encyclopaedia Britannica as, the principal constituent of natural rubber and therefore sometimes called pure rubber. It occurs as a vegetable gum, mixed with 1/ 20 to 8 times its own weight of other substances. Caoutchouc is a white resilient solid; at 0-10 deg