1973 (2) TMI 117
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.... by HEGDE, J.-In this appeal by certificate, three contentions were advanced, namely: (1) the High Court was not justified in interfering with a proceeding that was pending before the tax department, by exercising its extra- ordinary jurisdiction under article 226 of the Constitution; (2) the High Court erred in holding that the transfer of timber from Madhya Pradesh to Uttar Pradesh did not amount to sale; and (3) the High Court further erred in holding that sales effected by the assessee in Madhya Pradesh were not first sales. The facts of the case lie within a narrow area. The assessee is a registered dealer under the Madhya Pradesh Sales Tax Act. It was a forest contractor which had purchased large quantity of timber from th....
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....t was entirely within the discretion of the High Court. It is true that it was open to the High Court to decline to interfere with the proceedings at that stage. It could have directed the assessee to proceed under the provisions of the Sales Tax Act. But in our opinion the High Court rightly, on the facts and circum- stances of the case, thought that this was a fit case where it should interfere with the order made by the Sales Tax Officer. Hence, we see no reasons to interfere with the discretion exercised by the High Court. We shall now take up the question whether the High Court was justified in coming to the conclusion that the transfer of the timber effected by the assessee from Madhya Pradesh to Uttar Pradesh was not sale. The Sale....
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....ya Pradesh was considered as a dealer liable to pay tax under the Madhya Pradesh Sales Tax Act. On this point, there is no dispute. There is also no dispute that, as the law stood at the relevant time, the sales of timber by the Madhya Pradesh Forest Department were first sales, which were not exempt from the levy of sales tax. Hence when the taxing events took place, namely, when the sales in question took place, the assessee was not liable to pay any tax in respect of those sales, as the sales effected by him were second sales. But on June 1, 1963, the Madhya Pradesh Government issued a notification exempting the forest department from paying any sales tax in respect of the sales effected by it as from April 1, 1959, to November 2....