Case: State of Orissa and Another Vs. Gobinda Rath

S. K. DAS, J.The respondent is a dealer in fish, who purchases fish at Balugaon in Orissa and exports the same to Calcutta where the fish is sold to different customers. The Sales Tax Officer, Puri (Second Circle), assessed the respondent to sales tax for four quarters ending on June 30, 1949, September 30, 1949, December 31, 1949, and March 31, 1950. In the assessment orders the Sales Tax Officer did not find that the sales had taken place in Orissa in respect of the fish which was exported to Calcutta. We may quote one of the assessment orders to show on what basis the Sales Tax Officer proceeded. In his assessment order for the quarter ending June 30, 1949, the Sales Tax Officer said :"The dealer deals in fish. In response to the notice under section 12(5), he did not submit any return nor did he produce any accounts as directed in the said notice. On referring to his application filed by him on 29-1-51 in Form II for his registration, I find that his gross turnover was far in excess of Rs. 5, 000 during the year ending 31-3-49. Hence his liability for registration ensued from 1-4-49.It is ascertained through local enquiries that he sold 181 mds. 36 1/4 srs. of fish to dealers belonging to other States and 19 mds. 3 1/2 srs. to local dealers. It is further ascertained that the sale price of the fish was Rs. 45 per maund during the quarter under assessment. On the basis of the above data, I determine his gross turnover at Rs. 9, 044-11-6 or Rs. 9, 045. Out of this sum, he is allowed Rs. 181-0-0 under section 5(2)(b). His taxable turnover is thus determined at Rs. 8, 864-0-0 on which he should pay tax @ 0-0-3 pies in the rupee. Tax payable comes to Rs. 138-8-0.The dealers failure to apply for registration in time is considered to be wilful especially when he happens to be a dealer of Balugaon, one of the chief business centres of this Circle where almost all dealers have got themselves registered in time. I, therefore, direct that he should pay Rs. 50 by way of penalty for his default in this respect."Similar orders were passed for the other three quarters. There is no dispute about the local sale of fish in Orissa. The dispute is only about the fish exported to Calcutta. The respondent appealed against the assessment orders and contended that the fish exported to Calcutta was not sold in Orissa and he was not liable to tax under the Orissa Sales Tax Act, 1947 (Orissa Act XIV of 1947) in respect of such sales. The appellate authority did not accept the contention of the respondent. The respondent then made an application in revision and raised the same contention that the fish exported to Calcutta was not sold in Orissa. The Collector of Commercial Taxes rejected the application.The respondent then moved the High Court by means of a writ petition. The High Court held that the sales in the quarter after the coming into force of the Constitution were clearly outside Orissa, as the fish exported to Calcutta was delivered as a direct result of the sale for the purpose of consumption in the delivery State. The High Court referred to the decision of this Court in The State of Bombay and Another v. The United Motors (India) Ltd. and Others ([1953] 4 S.T.C. 133; [1953] S.C.R. 1069). As to the quarters prior to the Constitution, the High Court held that its decision in another case, that of Messrs Chakobhai Ghelabhai ([1956] 7 S.T.C. 36; I.L.R. (1955) Cuttack 529), applied and by reason of the repeal of the second proviso to section 2(g) of the Orissa Sales Tax Act, 1947, by the Adaptation of Laws Order, 1950, the respondent was not liable to sales tax. Accordingly, the High Court allowed the writ petition and quashed the assessment orders.The State of Orissa and the Sales Tax Officer, Puri, have preferred this appeal from the judgment and order of the High Court dated January 10, 1956, on a certificate granted by the High Court.This appeal was heard immediately after Appeal No. 710 of 1957 in which we had occasion to consider the correctness of the decision of the Orissa High Court in the case of Chakobhai Ghelabhai. By a judgment pronounced today we have allowed Appeal No. 710 of 1957 (Since reported as The State of Orissa and Another v. Chakobhai Ghelabhai and Co. [1960] 11 S.T.C. 716).Mr. N. C. Chatterjee appearing for the appellants has contended that the decision in Appeal No. 710 of 1957 will govern the assessment orders at least for the pre-Constitution period and they must be held to be good in this case. We are unable to agree. In Appeal No. 710 of 1957 we proceeded on an admission made on behalf of the assessee that the sales under consideration there were completed in Orissa, and we held that in view of that admission it was unnecessary to consider the second proviso to section 2(g) of the Orissa Sales Tax Act, 1947, or the Adaptation of Laws Order, 1950.What is the position in the present case ? On the findings arrived at by the assessing authorities there were no sales in Orissa, either under section 2(g) or the second proviso thereto. The Assistant Collector of Sales Tax found as follows :"He has evidently exported fish to purchasing dealers at Calcutta whom he called his commission agents. The Calcutta dealers regularly sent him advances against fish exported to them for sale. The appellant purchased fish in this State and consigned the same by rail at railway stations situated within this State. The purchasing dealers took delivery of the fish at the other end, stocked them in their godowns and ultimately sold them to third parties and remitted the value of the goods to the appellant less advances paid and godown and other charges."It is obvious from what has been quoted above that the Assistant Collector thought that the purchase of fish by the respondent in Orissa was enough to make him liable. That is clearly not so. The respondent was not asked to pay a purchase tax; he was asked to pay a tax on sales made in Orissa. The Assistant Collector found that the respondents agents sold the fish in Calcutta and remitted the price of the fish less advances paid and godown and other charges. This finding is tantamount to holding that the sales took place in Calcutta.Mr. Chatterjee drew our attention to an admission alleged to have been made on behalf of the respondent. It appears that the respondent admitted his liability to pay tax from April 1, 1949. This admission, however, related to a different question altogether, viz., whether the turnover of the respondent exceeded Rs. 5, 000 in the previous year so as to make him liable from April 1, 1949. The admission had no bearing on the question as to where the sales of the exported fish took place.We hold that on the findings given by the assessing authorities, the respondent was not liable to tax for any of the four quarters under the Orissa Sales Tax Act, 1947.

Decision:
0[ds]We are unable to agree. In Appeal No. 710 of 1957 we proceeded on an admission made on behalf of the assessee that the sales under consideration there were completed in Orissa, and we held that in view of that admission it was unnecessary to consider the second proviso to section 2(g) of the Orissa Sales Tax Act, 1947, or the Adaptation of Laws Order,the findings arrived at by the assessing authorities there were no sales in Orissa, either under section 2(g) or the second provisois obvious from what has been quoted above that the Assistant Collector thought that the purchase of fish by the respondent in Orissa was enough to make him liable. That is clearly not so. The respondent was not asked to pay a purchase tax; he was asked to pay a tax on sales made in Orissa. The Assistant Collector found that the respondents agents sold the fish in Calcutta and remitted the price of the fish less advances paid and godown and other charges. This finding is tantamount to holding that the sales took place inadmission, however, related to a different question altogether, viz., whether the turnover of the respondent exceeded Rs. 5, 000 in the previous year so as to make him liable from April 1, 1949. The admission had no bearing on the question as to where the sales of the exported fish took place.We hold that on the findings given by the assessing authorities, the respondent was not liable to tax for any of the four quarters under the Orissa Sales Tax Act, 1947.