'Finished cut timber' purchased from the Forest Department is not immovable property within the meaning of the Cess Act, 1880, and therefore not liable to cess.

The petitioner in this application under Articles 226 and 227 of the Constitution is aggrieved by the notice under letter no, 578, dated 24.2.1993, in so far it makes a demand for payment of cess @ 3% of the sale price of what has been described by the petitioner as 'finished cut timber' purchased by it from Latehar Forest Depot and Kolhan State Trading Depot of the Bihar State Trading Division, Latehar and Chaibasa. A photo copy or the impugned notice is to be found at Annexure-2. The impugned demand for case has been raised on the basis of a gazette notification, dated 28.8.1991, issued by the order of the Governor in terms of Clause (d) of section of the Cess Act, 1880 (Bengal Act IX of 1880). The notification reads as follows :

"S. O. 406 - In exercise of the powers conferred under clause (d) of section 6 of the Cess Act, 1880 (Bengal Act IX of 1880), the Governor of Bihar is pleased to fix the rate of cess at 3 percentum on the sale price of forest produce timber only.

"2. It shall come into force with effect from 1st September,1991.”

A copy of the gazette notification is to be found al Annexure-I.

2. It is to be noted at this stage that though in the writ Petition an objection was also raised against the gazette notification, in course of submission, the challenge was confined only to the demand notice as contained in Annexure-2. The challenge to the demand for cess was based on the plea that cess on 'finished cut timber' was not envisaged under the gazette notification (relating to forest produce timber) and any demand would be ultra vires the Cess Act.

3. The basic facts necessary to appreciate the petitioner's challenge to the demand notice arc very brief and can actually be summed up in a few sentences. The petitioner states that it purchased timber not when it was attached. to t he earth in the form of a tree or even in a standing position hut the purchase was made by the petitioner only after the trees had been fell down by the authorities of the Forest Department and the timber had been transported from the forest to the Department's depot. It was, accordingly, contended that at the time of purchase the goods ('finished cut timber') were obviously movable properties to which the Cess Act had no application inasmuch as any realisation of cess in terms of the Cess Act was in respect of immovable properties.

4. Mr. Biren Poddar, learned counsel appearing on behalf of the petitioner grudigngly staled that had the purchase been made of standing trees attached to the earth then perhaps the petitioner might have been held to be liable for payment of cess but when the goods, were being purchased in the form of 'finished cut timber' at the depot of the department then obviously the Cess Act, which concerned only immovable properties, would have no application. He further contended that even if it is held that cess was payable on those goods, the liability in any event will be that of the Forest Department and not of the present petitioner who was only a purchaser of the goods from the Forest Department.

5. The controversy, thus, boils down to whether or not 'finished cut timber' can he said to he immovable property within the meaning of the Cess Act.

6. Having heard learned counsel for the petitioner and the learned Government Advocate for the respondents, we arc or the opinion that the controversy stands settled by a Division Bench decision or this Court in the case or Someshwar Prasad Vs. State of Bihar & Ors., 1974 B. L. J. R. 378:1974 PLJR 387 which was later re-affirmed by a Full Bench decision in the case or M/s The Western India Match Company Ltd Vs, The Collector, Cess, Bettiah & Ors. 1981 B. L. J. 603:1981 PLJR 440 (F. B.).

7. Before referring to these decisions, however, it would be useful to take a note or the detintion or immovable properly in the Cess Act. Section 4 defines immovable property and runs as follows :

"4. Immovable property includes land and all benefits to arise out or land and things attached to th