TMI Blog1974 (11) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... rrying on business in logs and timbers. It purchased logs from various sources, processed the same in its mill and sold sized timbers either in the State of Orissa or in the course of inter-State trade and commerce. 3.. Admittedly, the assessee-opposite party purchased the logs and timber from registered dealers free of tax by furnishing declarations under rule 27(2) of the Orissa Sales Tax Rules, 1947 (hereinafter referred to as the Rules), and resold the same after converting the same into different shapes such as planks, rafters, railway sleepers, beams, ribs and other sized timbers by processing the same in its saw mill. This turnover of the assessee had escaped regular assessment made by the Assistant Sales Tax Officer, Sambalpur Circle III, Jharsuguda. Accordingly, he initiated proceedings under section 12(8) of the Act for the years 1961-62, 1962-63 and 1963-64. Following a decision of the Calcutta High Court in Shaw Bros. and Co. v. State of West Bengal[1963] 14 S.T.C. 878., the assessing officer held that by converting the logs into planks, beams, rafters, etc., a different commodity had come into existence and, therefore, the transaction attracted the proviso to section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .. Section 5(2)(A)(a)(ii) of the Act runs thus: "5. Rate of tax .......... (2)(A) In this Act, the expression 'taxable turnover' means that part of a dealer's gross turnover during any period, which remains after deduct. ing therefrom: (a) his turnover during that period on- (i) ........................ (ii) sales to a registered dealer of goods specified in the purchasing dealer's certificate of registration as being intended for resale by him in Orissa and on sales to a registered dealer of containers or other materials for the packing of such goods: Provided that when such goods are used by the registered dealer for purposes other than those specified in his certificate of registration, the price of goods so utilised shall be included in his taxable turnover." 6.. It is conceded by Mr. Pasayat, the learned counsel for the opposite party, that, in fact, the assessee had purchased logs from registered dealers free from sales tax on the basis of his registration certificate and has converted them into beams, rafters, railway sleepers, etc., and thereafter sold the commodity in Orissa. He conceded further fairly that there has been violation in respect of some of the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary meaning of the expression "timber". In the case[1975] 35 S.T.C. 270. relied on by Mr. Pasayat, he laid emphasis on certain portions, which we do not think has been interpreted in its proper perspective. Therein, it is said: " .......... all that is wood is not timber though timber is wood. In common parlance timber ordinarily means long logs of wood used for purposes of beams and pillars in the construction of houses and such similar uses. After the felling of big trees and the chopping off of the branches of those trees the trunk of the tree is called timber. A very long piece of log may be cut into different pieces. If the pieces after cutting still remain long so as to be used as beams, pillars and such similar uses, the cut pieces would still be called timber. To illustrate, a timber originally 60 feet long is cut into three pieces of 20 feet each. Each of the three pieces retains sufficient length to be used as beams or pillars and would be still treated as timber in common parlance. Take another illustration. After purchase of some timbers a dealer for the sake of convenience of transport may cut a portion from each end of the timber, may peel off the barks and polish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kes it clear that "if the original timber of 60 feet long is cut into thirty pieces of two feet each, none of the pieces is treated as timber". It further clarifies the position that timbers converted into firewood, rafters and planks are all wood but cannot be called "timber". This is what has been done in the instant case and as such the goods purchased under the declaration, free from sales tax, for resale in Orissa, have been sold in a different shape altogether, which goes by a different name in ordinary parlance in the commercial market. The ultimate finding in the quoted case[1975] 35 S.T.C. 270. of this court is immaterial for, in that case, the court, as a fact found: " .......... it is not possible for us to say whether the timbers were converted into a different commercial commodity by the act of sizing them." But in the instant case, conversion of the timbers into a different commercial commodity like planks, rafters, beams and ribs are all admitted. Thus on facts, they are quite distinguishable. If the argument advanced by Mr. Pasayat basing on this decision of the court-which obviously it does not mean-is accepted, it would lead to absurdity. For instance, tables, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the meaning given in the commercial circles is not of the essence and what is of essence is the identity of the goods, the learned counsel for the appellants relied on the decision of this court in State of Madhya Bharat (now State of Madhya Pradesh) v. Hiralal(1). There the relevant entry read 'iron and steel'. The question was whether when a dealer purchased scrap iron locally and imported iron plates from outside and after converting them into bars, flats and plates in his mills, sold them in the market, they continued to be 'iron and steel'. This court ruled that in spite of the change effected because of the process the goods had undergone, the goods sold in the market did not cease to be 'iron and steel'. We do not think that this decision is of any assistance to the appellants because both the goods purchased as well as sold were 'iron and steel'." In that case, their Lordships also took into consideration several other Supreme Court decisions and finally concluded thus: "Now, the question for our decision is whether it could be said that when paddy was dehusked and rice produced, its identity remained. It was true that rice was produced out of paddy but it is not tru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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