TaxTMI 
TaxTMI 
1958 (2) TMI 30
X X X X Extracts X X X X
X X X X Extracts X X X X
....d company incorporated under the Indian Companies Act, 1913, had their head office in Calcutta. They carried on the business of collection of bamboo and sabai grass in Orissa and sold the same to certain mills which manufacture paper, namely, the Orient Paper Mill, which is situate in Orissa, and Titagarh Paper Mill and Bengal Paper Mill, situate in Bengal. Sometime in June, 1948, a notice under section 12(5) of the Orissa Sales Tax Act, XIV of 1947, (hereinafter referred to as the Act) was issued to the res- pondents to which the latter sent a reply to the effect that they were not selling any goods in Orissa. A correspondence then ensued between the assessing authorities on one side and the respondents on the other, and on September 22, 1948, the appellant informed the respondents that the sales of bamboo and sabai grass which the respondents made to different mills both in Orissa and Bengal were sales in Orissa within the meaning of the provisions of the Act. Then, on September 28, 1948, the respondents were asked to submit returns, get themselves registered under the Act, and pay the requisite tax on their sales. The respondents sent no reply to this letter and after about a ye....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... a case on the following question of law: "Whether in the circumstances of the case the assessment is legal being based on the position that mere contract for sale within the State of Orissa and the export of goods from Orissa is sufficient for taxation under the Orissa Sales Tax Act, 1947." In pursuance of the order of the High Court, a statement of the case was submitted on the question formulated and by its judgment, dated November 15, 1954, the High Court answered the question in the negative and held that the assessment on the respondents was not legal. The present appellant then moved the High Court for a certificate and, this having been refused, the appellant moved this Court and obtained special leave to appeal. It is necessary to explain here, in somewhat greater detail, the reasons why the learned Judges of the High Court of Orissa thought that the particular question of law arose on the facts of the case and called for a reference of that question. The Act received the assent of the Governor-General on April 26, 1947, and was published in the Orissa Gazette on May 14, 1947. Section 1 of the Act came into force at once and the rest of the Act came into force on August 1,....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... under the second proviso to the definition of "sale" a power was given to impose tax on a transaction which was a mere agreement to sell, the learned Judges of the High Court held that the question whether the second proviso was ultra vires or not arose, and when the reference was finally heard, the learned Judges referred to the decision of this court in The Sales Tax Officer, Pilibhit v. Messrs. Budh Prakash Jai Prakash [1955] 1 S.C.R. 243; 5 S.T.C. 193 and answered the question by holding that the assessment was illegal as Entry 48 of List II of the Seventh Schedule of the Government of India Act, 1935, did not empower a State Legislature to impose a tax on a mere agreement to sell. The learned Solicitor-General appearing for the appellant has submitted before us that no such question as was formulated by the learned Judges of the High Court actually arose on the facts found in this case, and he has further submitted that the order calling for the reference and the answer which the High Court ultimately gave are based on a complete misapprehension of the decision in The Sales Tax Officer, Pilibhit v. Messrs. Budh Prakash Jai Prakash [1955] 1 S.C.R. 243; 5 S.T.C. 193......
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Uttar Pradesh Sales Tax Act, XV of 1948, which definition included forward contracts and the point for decision was whether the power to impose tax on the sale of goods under Entry 48 in List II of the Seventh Schedule to the Government of India Act, 1935, included the power to impose a tax on forward contracts. In that context the distinction between a "sale of goods" and an "agree- ment for a sale of goods" was pointed out, and the legal position was thus summarised: "The position therefore is that the liability to be assessed to sales tax can arise only if there is a completed sale under which price is paid or is payable and not when there is only agreement to sell, which can only result in a claim for damages; the power con- ferred under Entry 48 to impose tax on the sale of goods can therefore be exercised only when there is a sale under which there is a transfer of property in the goods and not when there is a mere agreement to sell". In the case under our consideration, on the facts found, no question arose of the imposition of a tax on a mere agreement to sell. The definition of "sale" in the Act, unlike the definition in the Uttar Pradesh Sales Tax Act, 1948, did not p....