1957 (7) TMI 33 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the petitioner is a "dealer" under section 2(3) of the Assam Sales Tax Act, 1947.
2. Whether the sale of standing sal trees constitutes a sale of "goods" under the Assam Sales Tax Act, 1947.
3. Whether the petitioner is liable to be registered and taxed under the Assam Sales Tax Act, 1947.
4. Whether the remedy under Article 226 of the Constitution is maintainable in this case.

Issue-wise Detailed Analysis:

1. Whether the petitioner is a "dealer" under section 2(3) of the Assam Sales Tax Act, 1947:
The petitioner contended that he was not a dealer as defined in section 2(3) of the Assam Sales Tax Act, 1947, which defines a dealer as "any person who carries on the business of selling or supplying goods." The petitioner argued that the disposal of standing sal trees was not an independent business but part of his zamindari rights, and thus did not amount to carrying on the business of selling or supplying goods. The court referenced various judgments, including Raja Visheshwar Singh v. Province of Bihar and Ramakrishna Deo v. The Collector of Sales Tax, Orissa, which supported the view that selling produce from one's land does not constitute carrying on a business. The court concluded that the petitioner was not a dealer, as he did not engage in an independent business of selling or supplying goods.

2. Whether the sale of standing sal trees constitutes a sale of "goods" under the Assam Sales Tax Act, 1947:
The petitioner argued that the sale of standing sal trees was a sale of immovable property, as the trees were attached to the earth. The court noted the definition of "immovable property" under section 2(30) of the Assam General Clauses Act, 1915, which includes things attached to the earth. However, the respondents contended that standing timber is not included in the definition of immovable property under section 3 of the Transfer of Property Act, and that the intention was to sever the trees from the land, making it a sale of movable property. The court found it unnecessary to decide this issue given the conclusion on the first issue.

3. Whether the petitioner is liable to be registered and taxed under the Assam Sales Tax Act, 1947:
Since the court concluded that the petitioner was not a dealer under section 2(3) of the Act, it followed that he was not liable to be registered or taxed under the Assam Sales Tax Act, 1947. The court set aside the order of the Commissioner of Taxes, Assam, which had held that the petitioner was liable to be registered and taxed.

4. Whether the remedy under Article 226 of the Constitution is maintainable in this case:
The learned Advocate-General raised a preliminary objection, arguing that the petitioner should seek remedy under the Assam Sales Tax Act itself, rather than under Article 226 of the Constitution. The court referenced the Bengal Immunity Co., Ltd. v. State of Bihar case, which allowed for the use of Article 226 when the legislation itself was not applicable to the petitioner. The court found that the Act did not apply to the petitioner, making the notice to register and submit returns void and illegal. Therefore, the remedy under Article 226 was maintainable.

Conclusion:
The application was allowed, and the order of the Commissioner of Taxes, Assam, was set aside. The respondents were directed not to take any action against the petitioner on the assumption that he is a dealer in respect of these transactions. The petitioner was entitled to his costs, with a hearing fee of Rs. 100.