TaxTMI 
TaxTMI 
1975 (9) TMI 157
X X X X Extracts X X X X
X X X X Extracts X X X X
....ions were not "sales". The assessee's contention was rejected and estimates were made both on the price of rice as also the gunny bags at the prescribed rates. In the first appeal, the assessee reiterated its contention that under the Levy Order, there cannot be any sale. That contention was negatived and the assessments were upheld. Before the Tribunal, reliance was placed on a decision of this court in the case of Bhagirath Agarwal and Brothers v. Sales Tax Officer, Ganjam I CircleSee page 566 infra; [1971] 2 C.W.R. 795., where It was held that supplies under Levy Orders cannot be treated as sales. The Tribunal accordingly annulled the assessments. 3.. The short question for determination is as to whether supplies effected in terms of the Levy Order constitute "sales". Clause 3 of the Levy Order provided: "Levy on rice.-(1) Every licensed miller shall sell to the purchase officer at the controlled price,- (a) at the commencement of this Order, 50 per cent of the quantity of rice held in stock by him at such commencement; and (b) beginning with such commencement and until such time as the purchase officer otherwise directs, 50 per cent of the total quantity of rice produced or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m every day beginning with the date of commencement of the Order. If he failed to carry out the obligation he was liable to be penalised. To ensure that he carried out his obligation his premises were liable to be searched and his property sequestered. The Order ignored the volition of the dealer. We are unable to hold that there was any contract between the assessees and the State pursuant to which the goods were sold within the meaning of the U.P. Sales Tax Act." In the meantime on 1st November, 1971, a larger Bench of seven judges in the case of Salar Jung Sugar Mills Ltd. v. State of Mysore[1972] 29 S.T.C. 246 (S.C.)., examined the question as to whether transactions under the Mysore Sugarcane (Regulation and Supply) (Munirabad) Order, 1965, amounted to "sale" exigible to sales tax. The larger Bench reviewed all the decisions relevant to the point in issue including the decision in Narain Das's case(1). The legal position was settled thus: "The Control Orders are to be kept in the forefront for appreciating the true character of transactions. It is apparent that the area is restricted. The parties are determined by the Order. The minimum price is fixed. The minimum quantity ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Mr. Mohanti's contention. 6.. We have now to consider two Bench decisions of this Court. The first one is the case of Choudhury & Sons v. State of Orissa[1973] 32 S.T.C. 271. The question for consideration was whether supplies made under the very Levy Order of 1964 amounted to "sale". Several cases of the Supreme Court were taken note of including that of Narain Das' case(1). The reference was made to the decision of the larger Bench in Salar Jung Sugar Mills' case(3) and the following observation in the latter decision was referred to: "(1) Statutory orders regulating supply and distribution of goods under Control Orders in a State did not absolutely impinge on the freedom to enter into contract. Delimiting areas for transactions or parties or denoting prices for transactions were all within the area of individual freedom of contract with limited choice; (2) Parties were certain and defined, the property in the goods was transferred from the grower to the factory (here from the licensee to the Joint Director of Food) and there was consideration for the transfer. The statutory orders required the parties to enter into agreements and the agreements contained intrinsic evidence....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(2). We find nothing therein to take a contrary view. To sum up, our conclusion is that under the Order, the contracting parties have some volition in certain spheres. The transaction between the plaintiff and the defendant Is exigible to sales tax........" This Division Bench decision actually took the view that an earlier decision in Union of India v. Sales Tax OfficerSee page 557 supra; [1971] 1 C.W.R. 693. stood overruled in view of the law stated by the Supreme Court by the larger Bench(2). In fact, if Bhagirath Agarwal's caseSee page 566 infra; [1971] 2 C.W.R. 795.had been brought to the notice of the Bench, the same conclusion as was reached with reference to Union of India v. Sales Tax OfficerSee page 557 supra; [1971] 1 C.W.R. 693. would have been reached. The decision relied upon by the Tribunal to come to its conclusion, therefore, would have been declared to be bad law. 7.. Having given our anxious considerations to the submissions of Mr. Mohanti, we are not able to accept the same. We would accordingly answer the question referred to us by saying: On the facts and in the circumstances of the case, the supply of rice under the Orissa Rice Procurement (Levy) Order, ....