TMI Blog1955 (7) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... an be held to be sales of goods within the meaning of Act XIV of 1947." Till 7th July, 1954, no case was stated as directed by this Court, but the Commercial Tax Officer was proceeding with the Certificate Cases Nos. 208 of 1950-51 and 146 of 1950-51 against the petitioners, in pursuance of which the Certificate Officer, Uditnagar, attached all the immovable properties of the petitioners including their factory and residential house and lands worth approximately Rs. 1,10,000 for the purpose of realisation of the impugned taxes by putting the properties to sale. Notice was also issued on the petitioners to show cause why they should not be arrested and committed to civil prison. Though the petitioners stated that they committed no act of bad faith, they were directed to bring an order of stay from this Court. They also filed an application for stay, but apprehending that there may be technical diffi- culty in granting the stay in the S.J. cases noted above, they filed this application under Articles 226 and 227 of the Constitution of India praying for issue of a writ in the nature of mandamus or any other order prohibiting the opposite parties from proceeding with the realisation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith transfer of property in goods. Undoubtedly, the property was transferred by the Orissa dealers to the Calcutta firms by delivery of the railway receipt. But at the time of delivery no money was paid or received by the respective firms. This shows that the property in the goods remained with the sellers until the Calcutta firms found a buyer for them. It cannot be said that the Calcutta firms became the owners of goods immediately after they were put in possession of the goods. They may have been in such possession either as bailees, or as agents, or as brokers." The Member, Board of Revenue, submitted the statement of the case on 7th July, 1954. According to the statement of the case, the firms of the petitioners carried on business in lac and lac products etc., at Biramitrapur. On 30th April, 1949, the firms applied for certificates of registration which were granted. No returns of turnover were filed by the firms for the quarters ending 30th June, 1949, and 30th September, 1949, as required by section ii of the Orissa Sales Tax Act and rule 20 of the rules there- under. On issue of notices under sections 11(3) and 12(4) of the Act, the parties only contended that lac was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sa Sales Tax Act was passed by the Legislature in 1947 and came into force in the old Province of Orissa sometime in that year. After the merger of the Gangpur State with Orissa, the Government of Orissa as the delegated authority of the Central Government and exercising powers under section 4 of the Extra- provincial Jurisdiction Act applied the Orissa Sales Tax Act of 1947 to the former Orissa States including Gangpur State by Notification No. 20306-States, dated 14th December, 1948. Mr. L.K. Das Gupta, the learned counsel for the petitioners, contends that the assessments of the petitioners to sales tax are illegal on two grounds. Firstly, he contends that the sales actually took place at Calcutta and consequently the petitioners cannot be made liable under the Orissa Sales Tax Act. Secondly, he contends that the notification made by the Government under section 4(1) of the Sales Tax Act was ultra vires and invalid, and consequently the petitioners could not be assessed to sales tax for the two periods; and that the said assessments were illegal and the tax imposed could not be realised from them. As far as the reference under consideration is concerned, it is only the first c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned Advocate-General also relies upon the second proviso to section 2 (g) (which was omitted after the coming into force of the Constitution by the Adaptation of Laws (Third Amendment) Order, 1951) which says: "Provided further that notwithstanding anything to the contrary in the Indian Sale of Goods Act, 1930, the sale of any goods which are actually in Orissa at the time when, in respect thereof, the contract of sale as defined in section 4 of that Act is made, shall, wherever the said contract of sale is made, be deemed for the purposes of this Act to have taken place in Orissa." (1) [1953] 4 S.T.C. 188; A.I.R. 1953 S.C. 274. He contends that by virtue of this proviso, the goods were in Orissa at the time of the contract of sale as defined in section; 4 of the Sale of Goods Act, 1930, and therefore the sale shall be deemed to have taken place in Orissa. But in this case there is absolutely no evidence as to the existence of any contract of sale or that the petitioners entered into contract of sale with anybody at Calcutta. In the order in the Revision Case before the Collector of Commer- cial Taxes, it is stated, "The dealer to whom the alleged commission agent sells th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments, along with other circumstances indicated that the property in the goods passed at Madras and the sales were accordingly completed in British India. Their Lordships observed: "The facts strongly relied on by him (learned Solicitor-General) are(1) that the price and delivery of goods were on F.O.B. terms, (ii) that in the European contracts the insurance, if any, was to be the concern of the buyers and (iii) that payment of the So per cent or go per cent., as the case may be, was made in Madras by the Eastern Bank Ltd., Madras, to the assessee company on the delivery of the documents. All these facts taken together indicate, according to his submission, that the property in the goods passed at Madras and the sales accordingly were completed in British India. We are unable to accept this line of reasoning." For the reasons stated above, I am of opinion that the two transactions do not amount to sales of goods and consequently the peti- tioners are not liable to pay any sales tax. I would, therefore, answer the question referred to this Court "whether on the facts and circum- stances of the case, the transactions in question can be held to be sales of goods within the meani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnover during the year immediately preceding the commencement of this Act exceeded Rs. 5,000 shall be liable to pay tax under the Act on sales effected after the date so notified. (2) Every dealer to whom sub-section (1) does not apply shall be liable to pay tax under this Act with effect from the commencement of the year immediately following that during which his gross turnover first exceeded Rs. 5,000." According to section 2 (j) of the Act, "year" is defined as "financial year", that is, 1st April to 31st March of the next year. The scheme of the Act was to tax certain classes of dealers in respect of transactions of sale which took place after the commencement of the Act, and to determine the class of dealers liable to pay sales tax, their gross turn- over during the year preceding the year of assessment was taken into consideration. Though the Act came into force in the old Province of Orissa in August, 1947, the liability for payment of sales tax did not arise immediately after that date. Consequently, a separate notification under sub-section (1) of section 4 was necessary and the express provi- sions of that sub-section required at least 30 days' interval between the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability arises only from the date as may be prescribed by Notifi- cation issued under sub-section (1) of that section, and the Act requires a minimum interval of 30 days. Consequently, the Government of Orissa issued a Notification No. 2269-F., dated 1st March, 1949, to the effect: "In exercise of the powers conferred by sub-section (1) of section 4 of the Orissa Sales Tax Act, 1947 (Orissa Act XIV of 1947) as applied to Orissa States, the Government of Orissa are pleased to appoint 31st March, 1949, as the date with effect from which every dealer whose gross turnover during the year ending 31st March, 1949, exceeded Rs. 5,000 shall be liable to pay tax under the said Act on sales effected after the said date." The Notification thus fixed 31st March, 1949, as the date from which the sales tax shall be assessed in Gangpur State which happens to be the end of the financial year 1947-48. Consequently, the dealers' liability for assessment arises only in respect of transactions of sale effected during the financial year 1949-50. The commencement of the Act, as far as the petitioners' State is concerned, is 1st March, 1949, and the financial year immediately preceding that date would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given in the said decision to hold the said notification invalid. I have already held in dealing with the first contention of the petitioners that the transactions do not amount to sales under the Sale of Goods Act. Consequently, the petitioners are not liable to be assessed for those quarters, and the opposite parties cannot realise the tax from the petitioners. The Department was also proceeding with the levy of the tax against the petitioners keeping pending the direction of this Court to state a case for the decision of this Court. O.J.C. No. 35 of 1954 is therefore allowed and the opposite parties therein are directed not to proceed with the certificate cases against the petitioners for realisation of the tax. The petitioners shall have their costs. Hearing fee is assessed at Rs. 100. The petitioners are also entitled to a refund of the tax paid as also a refund of the court-fee paid. For the same reasons, O.J.C. No. 36 of 1954 is also allowed and the opposite parties therein are directed not to proceed with the certificate cases against the petitioners for realisation of the tax. The petitioners shall have their costs. Hearing fee Rs. 100. The petitioners are also entitl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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