JUDGMENT

G. K. MISRA, C.J. - Under section 24(1) of the Orissa Sales Tax Act, 1947 (Act 14 of 1947) (hereinafter to be referred to as the Act), the Tribunal has referred the following question of law arising out of its appellate order passed on 26th December, 1970.

"Whether, on the facts and circumstances of the case, the Tribunal was right in holding that there was contravention of the proviso to section 52(2)(A)(a)(ii) inasmuch as the assessee purchased round logs from registered dealers on the basis of his registration certificate free of tax to resell them in Orissa but instead of doing so he converted them into sized wood and then resold the same ?"

2. The undisputed facts are that the petitioner purchased logs from registered dealers free of tax to the extent of Rs. 29,551.50 for resale in Orissa. The logs were cut into sizes in saw mills and then were resold in Orissa. All the taxing authorities held that by conversion of logs into sized wood the petitioner contravened section 5(2)(A)(a)(ii) of the Act.

3. Section 5(2)(A)(a)(ii) of the Act runs thus :

"In this Act, the expression 'taxable turnover' means that part of a dealer's gross turnover during any period which remains