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TMI Blog1976 (3) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 and 120 of 1969. G. Narayana Rao, Advocate, for the respondents in C.A. Nos. 69-73 of 1969. -------------------------------------------------- The judgment of the Court was delivered by JASWANT SINGH, J.-This bunch of Civil Appeals Nos. 67-122 and 238 of 1969 by certificate granted under article 133(1)(b) of the Constitution by the High Court of Judicature of Andhra Pradesh at Hyderabad by its order dated June 28, 1968, against its common judgment and order dated August 21, 1967, passed in Writ Petitions Nos. 489, 491, 537 to 541, 635, 684, 685, 687, 688, 830 to 832, 561, 1219, 715 to 719, 812, 813, 1216, 677, 638, 639, 695, 853 to 856, 636, 867, 870, 1146, 1285, 1260, 1261, 1284, 1292, 1293, 1294, 1309, 1310, 1340, 1447, 1697 and 1265 of 1967, which raise interesting questions of law relating to the interpretation of some of the provisions of the Indian Stamp Act, 1899, and the Andhra Pradesh General Sales Tax Act, 1957, shall be disposed of by this judgment. The facts giving rise to these appeals are: The forest department of the Government of Andhra Pradesh after giving a sale notice held, in accordance with the terms and conditions thereof, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 35(c) of the Stamp Act pleading that the security deposits were not mortgages so as to attract the provisions of the said article of the Stamp Act. The petitions were contested by the appellants herein who contended, inter alia, that pursuant to clause (6) of the terms and conditions of the sale notice, the respondents were bound to pay the stamp duties that were chargeable in view of the extension of the Indian Stamp Act to the whole of the State of Andhra Pradesh by the Indian Stamp (Andhra Pradesh Extension and Amendment) Act (19 of 1959) with effect from April 1, 1959, and the repeal of the Hyderabad Stamp Act, and the Rules, notifications, instructions, etc., made or issued thereunder; that the right acquired by the respondents was not merely a right to collect, appropriate and sell beedi leaves that had already grown but also the right to collect, use and sell beedi leaves that would subsequently grow on the standing trees and their branches taking nourishment from the land during the period of lease which showed that the respondents obtained under the agreements an interest in immovable property. The appellants further contended that the respondents were, according to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the General Clauses Act that has to be applied in determining whether the agreements in question fall within the definition of "lease" or not. It would be useful at this stage to set out in juxtaposition the definition of "immovable property" as contained in the aforesaid Acts, as also the definition of "goods" as given in the Sale of Goods Act: Section 3(26) of Section 3 of Section 2(6) of Section 2(7) of General Transfer of Registration Sale of Goods Clauses Act Property Act Act Act ----------------- ------------------ --------------- ------------------- "Immovable property" In this Act, unless "Immovable property" In this Act, unless shall include there is something includes there is anything land, bene- repugnant in the land, buildings, repugnant in the fits to arise out of subject or context, hereditary allowances, subject or context land, and things "immovable property" rights to "goods" means attached to the does not include ways, lights, ferries every kind of movable earth, or permanently standing or any other bene- property fastened to timber, growing fits to arise out of other than action- anything attached crops or grass. land, and things able ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is let into exclusive possession is, prima facie, to be considered to be tenant, nevertheless he will not be held to be so if the circumstances negative any intention to create a tenancy.' The Court of Appeal again in Cobb v. Lane [1952] 1 All E.R. 1199., considered the legal position and laid down that the intention of the parties was the real test for ascertaining the character of a document. At page 1201, Somervell, L.J., stated: "......the solution that would seem to have been found is, as one would expect, that it must depend on the intention of the parties.' Denning, L.J., said much to the same effect at page 1202: 'The question in all these cases is one of intention: Did the circumstances and the conduct of the parties show that all that was intended was that the occupier should have a personal privilege with no interest in the land.' The following propositions may, therefore, be taken as well-established: (1) To ascertain whether a document creates a licence or lease, the substance of the document must be preferred to the form; (2) the real test is the intention of the parties-whether they intended to create a lease or a licence; (3) if the document creates an inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abai Patel and Co. v. State of Madhya Pradesh [1953] S.C.R. 476., where contracts and agreements entered into by persons with the previous proprietors of certain estates and mahals in the State under which they acquired the right to pluck, collect and carry away tendu leaves, to cultivate, culture and acquire lac, and to cut and carry away teak and timber and miscellaneous species of trees called hardwood and bamboos were held in essence and effect to be licences. There is, of course, a judgment of this court in Mahadeo v. State of Bombay 1959 S.C.J. 1021; A.I.R. 1959 S.C. 735., where seemingly a somewhat different view was expressed, but the facts of that case were quite distinguishable. In that case, apart from the bare right to take the leaves of tendu trees, there were further benefits including the right to occupy the land, to erect buildings and to take away other forest produce not necessarily standing timber, growing crop or grass and the rights were spread over many years. For the foregoing reasons, the first question has to be decided in favour of the respondents. The second question that falls for consideration is whether the respondents could be validly called upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ials for money consideration in the execution of a works contract, provided that the contract for the transfer of such materials can be separated from the contract for the services and the work done, although the two contracts are embodied in a single document or in the supply or distribution of goods by a society (including a co-operative society), club, firm or association to its members, but does not include a mortgage, hypothecation or pledge of, or a charge on, goods." In order that the sales tax should be payable by the respondents in accordance with the obligation imposed on them by clause (23) of the sale notice, it is necessary that the Government of Andhra Pradesh should have been carrying on the business of selling the forest produce. In State of Gujarat v. Raipur Manufacturing Co. Ltd. [1967] 19 S.T.C. 1 (S.C.)., this court while examining the term "business" in another context observed that whether a person carries on business in a particular commodity must depend upon the volume, frequency, continuity and regularity of transactions of purchase and sale in a class of goods and the transactions must ordinarily be entered into with a profit-motive. The court further wen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stablished were that the assessee converted the latex tapped from its rubber trees into sheets and effected a sale of those sheets to its customers and the conversion of latex into sheets was a process essential for the transport and marketing of the produce, it was held that the department had not been able to discharge the onus of proving that the assessee was carrying on business and was, therefore, a dealer within the meaning of section 2(b) of the Central Sales Tax Act, 1956. In Ramakrishna Deo v. Collector of Sales Tax, Orissa [1955] 6 S.T.C. 674., where the Maharaja of Jeypore had sold the sal trees from his forest for preparing sleepers, it was held that he was not a dealer within the meaning of the Orissa Act because he was not carrying on the business of selling or supplying the goods for the reason that the element of purchase, one of the necessary ingredients of the business, was absent. In view of the foregoing discussion, we find ourselves unable to hold that the Government of Andhra Pradesh by holding auction of forest produce carried on business in the sale of that class of goods. As such, the respondents could not be made liable to pay the sales tax. There now re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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