TMI Blog1958 (2) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... mmercial Taxes, Orissa, is the appellant, and Messrs. Bharat Sabai Grass Ltd. are the respondents. The respondents entered appearance and filed a statement of their case; but later they withdrew appearanceand at the final hearing of the appeal, we have had the assistance of the learned Solicitor-General alone, who appeared in support of the appeal. The facts relating to the appeal lie within a very narrow compass. Messrs Bharat Sabai Grass Ltd., a limited company incorporated under the Indian Companies Act, 1913, had their head office in Calcutta. They carried on the business of collection of bamboo and sabai grass in Orissa and sold the same to certain mills which manufacture paper, namely, the Orient Paper Mill, which is situate in Orissa, and Titagarh Paper Mill and Bengal Paper Mill, situate in Bengal. Sometime in June, 1948, a notice under section 12(5) of the Orissa Sales Tax Act, XIV of 1947, (hereinafter referred to as the Act) was issued to the res- pondents to which the latter sent a reply to the effect that they were not selling any goods in Orissa. A correspondence then ensued between the assessing authorities on one side and the respondents on the other, and on Sep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d another to the Commissioner, Northern Division, Sambalpur. Both these applications were dismissed. The respondents then moved the Commissioner for a reference to the High Court under the provisions of section 24 of the Act. This application was also rejected by the Com- missioner. Then the respondents moved the High Court of Orissa and by an order dated July 29, 1952, the High Court directed the Commissioner, Northern Division, Sambalpur to state a case on the following question of law: "Whether in the circumstances of the case the assessment is legal being based on the position that mere contract for sale within the State of Orissa and the export of goods from Orissa is sufficient for taxation under the Orissa Sales Tax Act, 1947." In pursuance of the order of the High Court, a statement of the case was submitted on the question formulated and by its judgment, dated November 15, 1954, the High Court answered the question in the negative and held that the assessment on the respondents was not legal. The present appellant then moved the High Court for a certificate and, this having been refused, the appellant moved this Court and obtained special leave to appeal. It is necessa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of assessment is the order of the Sales Tax Officer, Sambalpur, dated December 16, 1949, and the Collector's letter dated September 22, 1948. From the letter of the Collector as we have quoted above, we find that, according to him, mere export of bamboo is sufficient to constitute a sale in Orissa. There seems to be enough force in the contention that a mere contract for sale cannot constitute a sale." Taking the view that under the second proviso to the definition of "sale" a power was given to impose tax on a transaction which was a mere agreement to sell, the learned Judges of the High Court held that the question whether the second proviso was ultra vires or not arose, and when the reference was finally heard, the learned Judges referred to the decision of this court in The Sales Tax Officer, Pilibhit v. Messrs. Budh Prakash Jai Prakash [1955] 1 S.C.R. 243; 5 S.T.C. 193 and answered the question by holding that the assessment was illegal as Entry 48 of List II of the Seventh Schedule of the Government of India Act, 1935, did not empower a State Legislature to impose a tax on a mere agreement to sell. The learned Solicitor-General appearing for the appellant has submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . There was no finding by any of the assessing authorities that a tax was imposed on "mere agreements to sell" or that the sales of bamboo and sabai grass made by the respondents to different mills in Bengal and Orissa did not involve a transfer of property in goods for cash or deferred payment. The case of Budh Prakash Jai Prakash [1955] 1 S.C.R. 243; 5 S.T.C. 193, dealt with the definition of "sale" in the Uttar Pradesh Sales Tax Act, XV of 1948, which definition included forward contracts and the point for decision was whether the power to impose tax on the sale of goods under Entry 48 in List II of the Seventh Schedule to the Government of India Act, 1935, included the power to impose a tax on forward contracts. In that context the distinction between a "sale of goods" and an "agree- ment for a sale of goods" was pointed out, and the legal position was thus summarised: "The position therefore is that the liability to be assessed to sales tax can arise only if there is a completed sale under which price is paid or is payable and not when there is only agreement to sell, which can only result in a claim for damages; the power con- ferred under Entry 48 to impose tax on the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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