TaxTMI 
TaxTMI 
1980 (7) TMI 236
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....f the case, the contract entered in the F-2 standard form is a works contract and, therefore, sales tax was not payable?" 2.. When the references came up for hearing before a Division Bench, the learned standing counsel heavily relied upon the Bench decision of this Court in the case of State of Orissa v. Utkal Distributors Private Ltd.[1974] 34 S.T.C. 347. in support of his stand and the assessee's counsel while conceding that the ratio of the reported decision was against him, maintained that the same was not correct and required to be tested by a larger Bench. Accepting the plea, this case has been asked to be heard by a Full Bench. 3.. We may straight proceed to deal with the reported decision. The second question in that case was....
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....y the learned standing counsel on clause (9) of the agreement in support of the contention that though the quarries belong to the P.W.D., the contractor acquired title to the materials on payment of royalty of Rs. 2 per 100 c.ft., and this payment of royalty is not explainable in any other manner than as a licence coupled with a grant by the P.W.D., in favour of the contractor to extract chips and bond stones." Reference was made by the Division Bench to the case of Chandra Bhan Gosain v. State of Orissa[1963] 14 S.T.C. 766 (S.C.)., where the Supreme Court had observed: "Another clause provided that the appellant (assessee) would not be able to sell the bricks to other parties without the permission of the company. Apparently, it was con....
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....ey's Law Dictionary. In paragraph 7, their Lordships observed thus: 'In Wharton's Law Lexicon (Fourteenth Edition) the word "royalty" has been explained as "payment to a patentee by agreement on every article made according to his patent; or to an author by a publisher on every copy of his book sold; or to the owner of minerals for the right of working the same on every ton or other weight raised". In Mozley and Whiteley's taw Dictionary (Sixth Edition) "royalty" has been defined as "a pro rata payment to a grantor or lessor, on the working of the property leased, or otherwise on the profits of the grant or lease. The word is especially used in reference to mines, patents and copyrights". It, therefore, appears that royalties are paym....
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....y change the position. 5.. If the assessee had undertaken a labour contract, he would not have had to pay royalty particularly when the quarry belonged to the State. Payment of royalty is in lieu of the right to exploit as also appropriate. What has been said by the Supreme Court in the case of State of Madhya Pradesh v. Orient Paper Mills Ltd.[1977] 40 S.T.C. 603 at 611 (S.C.); A.I.R. 1977 S.C. 687 at 693., with reference to payment of royalty in a forest lease case may be usefully quoted: "We are satisfied that despite its description, the deed confers in truth and substance a right to cut and carry timber of specified species. Till the trees are cut, they remain the property of the owner, namely, the appellant. Once the trees are s....
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....aterial on an approved site. The department had undertaken to supply the explosives for blasting for a price and even became entitled to charge 4 per cent of the cost of the explosives as storage charge. There was stipulation for payment of royalty to the forest department at prevailing rates for working the quarry. The work in different stages was open to departmental inspection. There was no restriction on sale of chips and stones collected by the assessee from the quarry to others. Admittedly, the quarries upon which the assessee was permitted to work belonged to the State Government and he was allowed to appropriate the chips and stones extracted by him on payment of royalty at the stipulated rate. 8.. The conditions in the contract ....