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TMI Blog1974 (2) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... arry any appeal against the assessment orders but paid sales tax of Rs. 9,825.24, which constituted the total demand for the three quarters. On 1st March, 1966, the plaintiff asked the defendant by letter, exhibit 7, to reimburse the tax demanded from him for payment. On 17th March, 1966, the plaintiff paid the sales tax by chalan, exhibit 2. By several letters-exhibit 5 dated 27th May, 1966, exhibit 3 dated 10th June, 1966, and exhibit 4 dated 6th July, 1966the plaintiff asked the defendant to reimburse the sales tax so paid. As there was no response from the defendant a notice (exhibit 1) under section 80, Civil Procedure Code, was served on 22nd August, 1966, and the suit was filed on 23rd December, 1966. Facts averred in the plaint are not disputed in the written statement. The suit was contested on the ground that the alleged transaction did not constitute a sale and sales tax was not exigible thereon. Plaintiff should have carried the matter higher up challenging the imposition of Central sales tax and despite the undertaking given, the defendant Is not liable to reimburse the plaintiff as he paid the sales tax, which is not leviable in law. The trial court decreed the suit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifty per cent of the total quantity of rice got milled by him every day out of his stock of paddy; and (ii) fifty per cent of the total quantity of rice purchased or otherwise acquired by him for the purpose of sale from persons other than licensed millers or licensed dealers. (3)........................ (4) The rice required to be sold to the purchase officer under subclause (1) or sub-clause (2) shall be delivered by the licensed miller or the licensed dealer to the purchase officer or to such other person as may be authorised in this behalf by the purchase officer. Clause 4.-Determination of the Price.-(1)............... (2) The price payable for the stock of rice shall be determined on the basis of the result of the analysis which shall be communicated to the miller or the dealer, as the case may be. (3) If, within a week of the receipt by him of the result of the analysis, the miller or the dealer, as the case may be, disputes the correctness of the result, the purchase officer shall arrange to get the other sample retained In the laboratory analysed, after previous intimation to the miller or the dealer about the date and time fixed for such analysis; the miller or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods which presupposes capacity to contract, that It must be supported by money consideration, and that as a result of the transaction property must actually pass In the goods. Mr. Das contends that though under the Order title to the goods passed from the plaintiff to the defendant, there was no contract between the parties inasmuch as the plaintiff was compelled under threat of penalty to sell the rice at the price fixed by the Order itself. No element of volition was left as between the contracting parties to settle the terms. Plaintiff had no way out but to sell the rice as directed by the defendant. 7.. The nature of transaction of a sale under Control Orders was examined In Salar Jung Sugar Mills Ltd. v. State of Mysore[1972] 29 S.T.C. 246 (S.C.); A.I.R. 1972 S.C. 87. by a Bench consisting of seven judges. All the previous decisions In the field were reviewed. It Is unnecessary to refer to, and discuss, the very decisions dealt with by the Supreme Court. It would be sufficient to extract the major conclusions of their Lordships in that case. Their Lordships observed thus: "These decisions establish that statutory orders regulating the supply and distribution of goods by and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sale. Such restrictions may become necessary by reason of co-ordination between production and distribution in planning the economy of the country." 8.. The aforesaid two passages lay down in unmistakable terms that if there is any volition in between the contracting parties in any sphere, however narrow or delimited it may be, then there is a contract and the transaction amounts to sale. It is only when volition is completely excluded, the transaction may be an acquisition and not a sale though the words used may indicate that it is a sale. Each case would be governed by its own facts and the true nature and character of the transaction must be determined on an analysis of all the features arising in a case. 9.. As has already been indicated in paragraph 4, there is scope for exercise of volition between the parties to the transaction and as such the transaction is a sale and is exigible to sales tax. 10.. In view of the pronouncement in Salar Jung Sugar Mills Ltd. v. State of Mysore[1972] 29 S.T.C. 246 (S.C.); A.I.R. 1972 S.C. 87. , we are unable to apply the principles laid down in Chittar Mal Narain Das v. Commissioner of Sales Tax[1970] 26 S.T.C. 344 (S.C.); A.I.R. 1970 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evelopments emphasise that to make a contract may no longer be a purely private act. It may be controlled or even dictated by legislative or economic pressure, and it may involve the courts in feats of construction akin to or borrowed from the technique of statutory interpretation. Yet it is possible to exaggerate the effect. In daily life individual contracts exist and even abound. Moreover, as has already been said, the current law of contract is essentially the creation of the nineteenth century lawyers, and it is this law which their successors have to apply even in a new and uncongenial environment. The tools of the trade remain the same if they are put to uses that their inventors neither envisaged nor desired. What must be emphasized is the external approach to the idea of contract which is so conspicuous a feature of the Common law. It is for this reason that the title of the present chapter is not Agreement but The Phenomena of Agreement, concerned not with the presence of an inward and mental assent but with its outward and visible signs." (pages 23-25) The aforesaid passages clearly bring out the essential features of a contract in Control Orders into bold relief. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e accounts and documents specified on the reverse of the notice. Without submitting a return the petitioner filed an objection petition (annexure B) on 3rd April, 1967, stating inter alia that he was not a dealer and that the purchase of rice by him was under the Orissa Rice Procurement (Levy) Order, 1964 (hereinafter referred to as the Order), and that there was no transaction of sale to make him liable to pay purchase tax. It was prayed that the notice calling for the returns might be withdrawn and cancelled. In reply, the opposite party wrote the letter (annexure C) on 4th August, 1967, which runs thus: "In the circumstances of the case, the proceedings for assessment initiated stand after due examination of the contentions raised. Please therefore produce the relevant accounts of procurement and disposal of rice during the period of December, 1964, to December, 1965, on 21st August, 1967, at 2 p.m. before the undersigned in his office at Balasore. The details of purchase price and costs should be furnished on the date of hearing besides the quantity procured (levy and levy fee) in each month from December, 1964, to December, 1965." The writ application was filed on 4th Septe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the party from the onerous burden of going through the assessment proceeding where on the very face of it the transactions are not exigible to tax. But these constitute exceptional types of cases. Ordinarily a person on whom a notice is served is to produce his accounts and satisfy the assessing authority that the transactions are not taxable. A machinery has been provided under the Act as to how assessment is to be made initially. At that stage the action of the assessing authority in issuing notice is not justiciable. The assessing authority has got the initial jurisdiction to determine whether it has the jurisdiction to assess. If objections are raised in response to the notice it is open to the assessing authority, after looking into the accounts and relevant materials on record, to come to the conclusion that the transactions are not exigible to tax. It need hardly be stated that the assessing authority would also keep the law and the authorities in view and it cannot be contended that it is the High Court alone which would respect law and not the taxing authorities. 3.. In Cement Marketing Co. of India, Bangalore v. State of Mysore[1971] 27 S.T.C. 159 (S.C.). , their Lordsh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... encement; and (b) beginning with such commencement and until such time as the purchase officer otherwise directs,- (i) 50 per cent of the total quantity of rice got milled by him every day out of his stock of paddy; and (ii) 50 per cent of the total quantity of. rice purchased or otherwise acquired by him for the purpose of sale from persons other than licensed millers or licensed dealers." In respect of this 50 per cent, clause 3 sets up a machinery for compulsory acquisition of the stocks belonging to the licensed millers and dealers by the purchase officer. By virtue of clause 3 the purchase officer is not to enter Into a formal contract for procuring the rice. The obligation to deliver 50 per cent of the rice is not by virtue of any contract but by virtue of the statutory order. 6.. All the relevant Supreme Court decisions were examined in Maheswar Mahapatro v. State of Orissa[1972] 29 S.T.C. 52; (1971) 1 C.W.R. 261. Therein we examined the concept of the word "sale" as defined in section 2(g) of the Act. In paragraph 9, we observed thus: "9. In this matter no hard and fast rule can be laid down. The ultimate conclusion would depend on the facts of each case. The ratio of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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