Forest produce timber cess remains valid; levy attaches on felling, and the burden may be passed to purchasers.

Cess imposed on forest produce timber was construed as applying to trees and standing timber under the Cess Act, so the taxable event arose when the trees were felled. On that reading, the notification fixing cess at 3% was not ultra vires merely because the timber had been cut and finished, and the distinction between movable and immovable property was treated as irrelevant to the levy's validity. The person liable to cess was also entitled in law to recover or pass on the burden to the purchaser through the sale note and auction process, and the challenge to the cess demand failed.

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Issues: Whether the notification fixing cess at 3% on forest produce timber was ultra vires the Cess Act insofar as it applied to cut and finished timber and whether the liability could be passed on to purchasers of such timber.

Analysis: The notification was construed as levying cess on "forest produce timber" under clause (d) of section 6 of the Cess Act, 1880 (Bengal Act IX of 1880), which was understood to mean trees and standing timber. On that construction, the taxable event arose when the trees were felled. The Court held that nothing in law prevented the person liable to cess from recovering or passing on that burden to the purchaser, as reflected in the sale note and auction process. In view of that legal position, the debate whether cut and finished timber was movable or immovable property was treated as irrelevant to the validity of the levy.

Conclusion: The notification was held valid and the challenge to the cess demand failed.

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