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HIGH COURT OF CALCUTTA
B. N. Banerjee
BACHHA TEWARI - Appellant
Versus
DIVISIONAL FOREST OFFICER, WEST MIDNAPORE DIVISION - Respondent
Civil Rule 150w Of 1961
Decided On : FEBRUARY 25, 1963
Sales Tax - Standing Timber - Manufacturing Process - Double Taxation
Fact of the Case:
The petitioner argued against the taxation of standing timber under the Bengal Finance (Sales Tax) Act, claiming it was not goods but immovable property. Additionally, the petitioner contended that chopped firewood was not manufactured goods and that being taxed on both timber and firewood amounted to double taxation.
Finding of the Court:
The court found that standing timber could be taxed under the Sales Tax Act as it was considered a manufactured article with commercial value. The court also rejected the argument of double taxation, stating that there was no reason to escape assessment on the manufactured commodity.
Issues: The issues involved the classification of standing timber, chopped firewood as manufactured goods, and the alleged double taxation of the petitioner.
Ratio Decidendi: The court interpreted the manufacturing process to include the chopping of timber into firewood, considering firewood as a manufactured article subject to taxation. The court also emphasized that the assessment on the manufactured commodity was justified and did not constitute double taxation.
Final Decision: The court dismissed all three arguments made by the petitioner and discharged the Rule, making no order as to costs.
( 1 ) A three-fold grievance was made in this Rule by Mr. B. K. Panda, learned Advocate for the petitioner. He contended, in the first place, that the petitioner purchased standing timber and the Authorities should not have taxed standing timber under the Bengal Finance (Sales Tax) Act, because standing timber is not goods but immovable property. It must be stated in fairness to Mr. Panda that he did not ultimately press this point. Mr. Panda contended, in the next place, that the petitioner merely chopped the timber into firewood but chopped firewood was not manufactured goods. Since the petitioner's gross turnover did not exceed rupees ten thousand he was not liable to pay, sales tax on the turnover. This argument is misconceived. Manufacturing process means to bring into being a commercial article for sale in the business in which the dealer is engaged, i. e. , article which by itself has a commercial value and which can be the subject-matter of sale for a price in course of the business of selling or supplying in which the dealer is engaged. There is no reason to exclude the chopping of timber into firewood from the ambit of manufacturing process. If firewood is a manufactured article, then the second branch of the argument of Mr. Panda must fail.
( 2 ) THE last argument advanced by Mr. Panda was that the petitioner was at first taxed on timber and again taxed on firewood. This, be concluded, amounted to a double taxation which must not be allowed to remain. This argument is not very well conceived. The petitioner was no doubt taxed on timber. After he manufactured firewood from timber, there was no reason to escape assessment on the manufactured commodity.
( 3 ) ALL the three arguments made by Mr. Panda fail and this Rule is discharged. I, however, make no order as to costs.
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