Judgment Case ID: 1555

Judgment:
minal Appeal No. 121 of 1961. Appeal by special leave from the judgment and order dated May 26	 1961 of the Punjab High Court	 Circuit Bench at Delhi in Criminal Revision No. 159 D of 1961. Nur ud din Ahmed and Naunit Lal	 for the appellant. V. D. Mahajan and P. D. Menon for R. N. Sachthey	 for the respondent. November 27. The judgment of the Court was delivered by SUBBA RAO	 J. This appeal by special leave is directed against the order of the Punjab High Court dismissing the Revision petition filed against the order of the Additional Sessions judge	 Delhi. The appellant entered India on May 9	 1956	 on a Pakistan passport dated February 11	 1956. He had a visa endorsed on the said passport permitting him to stay in India for three months. Under that visa he had to leave India on or before August 8	 1956	 As he failed to do SO.	 a notice under section 3 (2) of the as amended in 1957	 hereinafter called the Act	 was served on him on 562 November 19	 1959	 by the Delhi Administration. By that notice he was asked to report his presence personally to the Foreigners Regional Registration Officer	 Taj Barracks	 janpath	 New Delhi	 between 11 A. M. to 12 noon daily and enter into a personal bond in the amount of Rs. 5	000/ with two sureties in the amount of Rs. 10	000/ each for the due	 observance of ' the restriction imposed on his movements. The appellant did not comply with the requirements of the notice. Therefore he was prosecuted under section 14 of the Act for violating the provisions of section 3 in the Court of the Sub Divisional Magistrate	 Delhi. The appellant pleaded in defence that the said notice was not served on him and that he was a citizen of India. The learned Magistrate held on the evidence that the said notice was served on him and that he was not a citizen of India but a foreigner within the meaning of that Act and that he had committed an offence	 inasmuch as he did not comply with the provisions of the said notice. On those findings he convicted him under section 14 of the Act and sentenced him to six months ' rigorous im prisonment. On appeal the Sessions Judge	 Delhi confirmed the findings of the Magistrate and dismissed the appeal filed by him. He held that the burden was upon the appellant to prove that he was not a foreigner and that he had failed to discharge the same. He also rejected the plea of the appellant 'viz. that as on the date he entered India	 he was not a foreigner within the meaning of the definition of "foreigner ' as it then stood he could not be convicted	 on the ground that be was prosecuted for an offence committed after the definition was amended. The High Court confirmed the conviction of the appellant and the sentence passed against him. Hence the appeal. The learned counsel Mr. Nur ud Din appearing for the appellant raised before us the following two points: (1) the appellant was not a foreigner 563 within the meaning of the definition of a foreigner as existed at the time he entered India	 i. e. on May 9	 1956	 and therefore the High Court went wrong in convicting him	 and (2) the appellant is not a foreigner even under the amended definition To appreciate the first contention it will be convenient to read the relevant provisions of the Section 3 : "The Central Government may by order make provision	 either generally or with respect to all foreigners or with respect to any particular foreigner or any prescribed class or des cription of foreigner	 fir prohibiting	 regulating or restricting the entry of foreigners into India or their departure therefrom or their presence or continued presence therein. (2)In particular and without prejudice to the generality of the foregoing power	 orders made under this section may provide that the foreigner. . (a) x x x (b) x x x (c) x x x (d) x x x (e) shall comply with such conditions as may be prescribed or specified (i) requiting him to reside in a particular place; (ii) imposing any restrictions on his movements; 564 (iii)	 (iv)	 (V)	 (vi)	 (vii)	 (viii)	 (iX)	 (X) (f) shall enter into a bond with or without sureties for the due observance of	 or as an alternative to the enforcement of any or all prescribed or specified restrictions or conditions: The definition of a foreigner as it stood in 1953 was 'Foreigner ' means a person who is not a natural born British subject as defined in sub sections 1 & 2 of section 1 of the British Nationality and Status of Aliens Act	 1914. Section I (1) of the British Nationality and Status of Aliens Act	 1914	 is in these terms : 'The following persons shall be deemed to be natural born British subjects	 namely	 (a) any person born within His Majesty 's Dominion and allegiance. ' The definition of a foreigner was substituted by the Foreigners Laws (Amendment) Act	 1957 (11 of 1957) section 2 (a). This amendment came into force with effect from January 19	 1957. Under the said definition	 	foreigner ' means a person who is not a citizen of India. Section 14 is : 'If any person contravenes the provisions of this Act or of any order made thereunder	 or any direction given in pursuance of this Act or such order	 he shall be punished with imprisonment for a term which may extend to five years and shall also be liable to fine; and if such person has entered into a bond in pursuance of clause (f) of Sub section (2) of section 3	 his bond shall be forefeited; and any person bound thereby shall pay the penalty thereof	 or show cause to the satisfaction of the convicting Court why such penalty should not be paid. ' 565 The gist of the foregoing provisions relevant to the present inquiry may be stated thus : Under the definition of a foreigner as it stood in the Act in 1953 before the amendment of 1957	 any person barn within His Majesty 's Dominion and allegiance was a citizen of India but after the amending Act 11 of 1957 which came into effect from january 19	 1957	 a person who is not a citizen of India is a foreigner. After that date if an order is issued by the Central Government in exercise of powers conferred on it under section 3 of the Act directing a foreigner so defined and prescribing certain conditions for his stay	 it is the duty of such a foreigner to obey the said order. If he did not	 he would be committing an offence within the meaning of section 14 of the Act. In the light of the said provisions let us look at the facts of the present case. As aforesaid the appellant entered India in 1956 on a Pakistan passport	 the visa endorsed on it enabled him to stay in India till August 8	 1956. The Delhi Administration made an order and served on him on November 19	 1959	 imposing the restrictions on his stay. Admittedly the appellant did not comply with the said restrictions and therefore lie committed an offence within the meaning of section 14 of the Act. It is contended that as the appellant was not a foreigner at the time he made his entry into India	 he could not be convicted on the basis he was a foreigner within the meaning of the definition of a foreigner as subsequently amended. There is a fallacy underlying in this argument. The appellant was certainly not a foreigner when he entered India under the definition of a foreigner as it then stood. In view of the amendment of the definition he became a foreigner after January 19	 1957. He could not be convicted for an offence for an act done by him before the amendment on the basis he was a 566 foreigner ; for instance an act done by him such as his entry into India or his noncompliance with the conditions of an order issued on him before the amendment on the foot that he was a foreigner. But the offence for which he is now charged is an act done by him in derogation of an order issued to him after the amendment. On the date when the Delhi administration served on him the notice imposing certain restrictions and directing him to comply with certain conditions for his stay he was a foreigner within the meaning of amended definition. On the basis of the existing law he committed an offence and it will be futile for him to contend that he was not a foreigner under the original definition. The legality of the act done by him must be judged on the basis of the existing law as the act was done subsequent to the amendment. Reliance is placed upon the decision of this court in Fida Hussain vs State of Uttar Pradesh (1) in support of the contention that as the appellant was not a foreigner when he made the entry	 he could not be convicted on the ground he was a foreigner. But the facts of that case are different from those in the present appeal and that decision is clearly distinguishable. There a person was born at Allahabad at the time when it was his Majesty 's Dominion. * He had left India to Pakistan but returned on a passport granted by the Government of Pakistan on May 16	 1953. He had a visa endorsed on his passport by the Indian authorities permitting him to stay in India for three months and this permission was later extended up to November 1953. Under Paragraph 7 of the Foreigners Order 1948 issued under section 3 of the 	 every foreigner entering India on the authority of a visa shall obtain from the appropriate authority a permit indicating the period during which he is authorised to remain in India and shall	 unless that period is extended	 depart from India before its expiry. As the appellant stayed after November 15	 1953	 without permission given 567 under that order	 lie was prosecuted for breach of the said order. It would be seen from the said facts that the appellant therein was prosecuted for an offence committed by him before the Amending Act of 1.957 came into force on January 19	 1957. This court on the said facts held that the appellant therein could not be convicted for the breach of Paragraph 7 of the Foreigners Order as lie not being a. foreigner at that time could not have committed a breach thereof	 but clearly this decision cannot apply to an offence committed by a person who falls within the amended definition of foreigner '	 after the Amending Act came into force. Indeed this court in express terms left open that question at page 1523 "No question as to the effect of the amended definition on the appellant 's status fell for our decision in this case	 for we were only concerned with his status in 1953. We would also point out that no order appears to have been made concerning the appellant under section 3(2) (c) and we arc not to be understood as deciding any question as to whether such an order could or could 	 not have been made against the appellant. " What has been left open in that decision is to be considered in the present case. The appellant who is 'a foreigner under the amended definition has committed a breach of an order served on him after the amended definition of a foreigner came to hold the field. The appellant therefore in disobeying the directions given to him	 by the Delhi Administration his committed an offence within the meaning of section 14 of the Act. Even so it is contended that the appellant is an Indian citizen and therefore is not a foreigner within the meaning of the amended definition of a foreigner under the Act. Some of the relevant provisions of the Constitution and the Citizenship Act 57 of 1955 may conveniently be extracted. Article 5 of the Constitution says "At the commencement of this Constitution	 568 every person who has his domicile in the territory of India and (a) who was born in the territory of India; or (b) either of whose parents was born in the territory of India; or (c) who has been ordinarily resident of the territory of India for not less than five years immediately preceding such commencement	 shall be a citizen of India. " Section 9 of the Indian is in these terms : "If in any case not falling under section 8 any question arises with reference to this Act or any order made or direction given thereunder	 whether any person is or is not a foreigner. the onus of proving that such person is not a foreigner. shall	 notwithstanding anything contained in the (1 of 1872) lie upon such person". Under article 5(a) of the Constitution the appellant cannot be a citizen of India unless he was born in the territory of India and had his domicile in the territory of India at the commencement of the Constitution. In this case the appellant claimed to be a citizen under article 5(a) of the Constitution. By reason of section 9 of the Foreigners ' Act whenever a question arises whether a person is or is not a foreigner	 the onus of proving that he is not a foreigner lies upon him. The burden is therefore upon the appellant to establish that he is a citizen of India in the manner claimed by him and therefore he is not a foreigner. This court in Union of India vs Ghaus Mohammad (1) accepted this legal position and laid down at page 748 thus : "It does not seem to have (1) ; 569 been realised that the burden of proving that he was not a foreigner	 was on the respondent and appears to have placed that burden on the Union. This was a wholly wrong approach to the question	 Rightly throwing the onus on the appellant the Magistrate considered the evidence and came to the conclusion that the appellant had failed to prove that he was a citizen of India and therefore not a foreigner. The learned Additional Sessions judge after noticing that the onus was on the appellant considered the evidence both oral and documentary and came to the conclusion that the appellant had failed to discharge the onus. It cannot be and indeed is not suggested that the said finding is vitiated by any error of law, but it is contended that the Additional Sessions judge was not justified in ignoring the evidence of 'respectable witnesses who spoke to the fact that the appellant was born in India and continued to reside in India at the date of the commencement of the Constitution and thereafter. The learned Additional Sessions Judge as a Judge of fact considered the evidence in the light of probabilities and the documentary evidence and rejected the same as unworthy of credence. The High Court in revision refused to interfere with that finding. We do not see any permissible ground for interference with that finding in an appeal under article 136 of the Constitution. No other point is raised before us. The appeal fails and is dismissed. 
3815	Appeal No. 49 of 1972. Appeal from the Judgment and Order dated 24th December, 1970 of the Madhya Pradesh High Court in Mic. Petition No. 474/68. Panjwani, H.S. Parihar and 1. N. Shroff for the Appel lants. B. Sen, (Mrs.) Leila Seth, T.M. Sen, Praveen Kumar and O.P Khanan for Respondent. The Judgment of the Court was delivered by KRISHNA IYER, J. The State of Madhya Pradesh, blessed with abundant forest wealth, whose exploitation, for reasons best known to that government, was left in part to the private sector, viz., the respondent, Orient Paper Mills, which is the appellant in this appeal by certificate. The subject matter of this litigation, however, is the competen cy to collect sales tax from the respondent for the bamboo and salai wood extracted by it, under a transaction relating to some government forests in Vindhya Pradesh which, on 'states reorganisation ' in 1956, became part of Madhya Pradesh. The transaction itself was dressed up as a lease deed executed by the then State of Vindhya Pradesh on August 4, 1956 in favour of Orient Paper Mills, the respondent herein. At that time no sales tax could be levied under the law from the forest department of the appellant State or the respondent mills. However, on April 1, 1959 the M.P. Gener al Sales Tax Act, 1958, (hereinafter referred to acronymi cally as M.P.G.S.T. Act) came into force. On the footing that the Forest Department was a dealer it got itself regis tered as such, under the sales tax law, on November 3, 1962. The respondent, of course, is a registered dealer under the same law. Subsequently, the Chief Conservator of For ests, representing the appellant, demanded of the respondent that it pay sales tax on the timber extracted under the 'lease deed ', whereupon the claim was repudiated by the respondent. In consequence, 151 the appellant proceeded to. levy the sum representing the sales tax on the value of the timber cut and removed as per the terms of the contract, resorting to revenue recovery proceedings authorised by Sec. 82 of the Indian Forest Act. Thereupon the respondent moved the High Court for the issu ance of a writ under article 226 of the Constitution of India against the State. to forbear from collecting sales tax illegally. Holding that the State Government and its Forest Department were not dealers w;thin the sense of the sales tax law, the writ petition was allowed, notwithstand ing the adverse findings against the petition respondent on some other vital points. The State has challenged this finding in the appeal before us. The validity of the attempted exaction is the gut issue in these proceedings, although the centre of gravity on this forensic stage has shifted from the question of the forest department being a dealer to whether the transaction styled 'lease ' does at all involve sale of goods. From 'no dealer, no sales tax ' to 'no sale no sales tax ' is the shift in the epicentre of the argument caused by an amendment to the sales tax statute legislated after and on account of the very judgment under appeal. Suffice it to say for the present, no sale, no sales tax is a legal tru ism. It may be mentioned right here that the respondent before us is not directly liable to pay sales tax, even assuming that the 'lease deed ' involves sale of goods. The forest department of government is admittedly a registered dealer for the relevant period, and it is claimed by the appellant State that it was liable qua dealer to pay tax on sales of timber, and by virtue of section 64 A of the Sale of Goods Act such sums, which became leviable only after the agreement was entered into in 1956, could be recovered from the purchaser respondent. It is virtually admitted in this appeal, as stated earlier, that both parties are registered dealers under the relevant sales tax Act. Nor is it in dispute that if the appellant forest department were liable to pay sales tax for the sales of timber which were alleged to have taken place, the respondent, in turn, would be liable to make good that sum in view of the plain provision in section 64A of the Sale of Goods Act. But to attract that provision there has to be sale of goods. Was there any sale of wood under the lease deed ? That is the core of the legal quarrel agitated before us. We may straight proceed to consider the questions canvassed before the High Court since both sides have had to challenge one or other of the findings. We may borrow the formulation of the four points set out in the judgment of the High Court. (i) The transaction is not a sale of goods and no sales tax is payable in respect of bamboos and salai wood extracted thereunder by the petitioner. (ii) No sales tax is payable under the terms of the lease deed dated August 4	 1956 and	 therefore	 such tax cannot be recovered. (iii) Neither the State Government nor the Forest Department of that Government is or could be a dealer and for this reason also no sales tax is payable or recoverable. 152 (iv) The sales tax	 even if payable	 is not recoverable as arrears of land revenue	 particularly when the revenue recovery certificate was issued by the Divisional Forest Officer. " The time is set true for stating the decisive statutory changes which occurred after the High Court ruled against the State	 calculated to undo the disability discovered by that pronouncement. This development deserves attention as the sole point on which the State lost in the High Court	 viz. that the Forest Department is not doing business	 ceases to have relevance today on account of the amendment to the Madhya Pradesh. General Sales Tax Act by the MPGST (Amendment and Validation) Act 13 of 1971. The definition of 'dealer ' and other related provisions were touched up and redefined in such manner that the finding on point No. 3 formulated by the High Court was effectively nullified. Indeed	 the legislation is a sequel to the decision and has squarely undone the impediment in the way of the State collecting sales tax from the respondent. So long as that law holds good the State 's claim cannot be bowled out. Of course	 Sri B. Sen	 for the respondent	 desired to challenge the vires of the Amending Act but the Presidential Proclama tion during the Emergency	 suspending the operation of article 14	 handcuffs the respondent from seeking to strike down this legislation. When the Presidential Proclamation	 sterilising article 14	 lapses then it may be time enough to assail ' this law. So far as this appeal is concerned	 article 14 is under eclipse and the ground of challenge unavailable. The amendatory provisions must therefore be held impregna ble	 on this score	 and we proceed on that footing. Its post Emergency validity will be decided	 if attacked	 at that time	 since we leave that aspect untouched. To abbre viate the discussion	 thanks to Act 13 of 1971	 the Forest Department of the State shall be deemed to be dealer. If it is a dealer	 the levy of sales tax from it is legal and the controversy on this score is silenced. The meat of the matter is the judicial determination of the true character of the transaction of 'lease ' from the angle of the MPGST Act and the Sale of Goods Act whose combined operation is pressed into service for making the tax exigible from the Forest Department and	 in turn	 from the respondent mills. It is the part of judicial prudence to decide an issue arising under a specific statute by confining the focus to that ' statutory compass as far as possible. Diffusion into wider jurisprudential areas is fraught with unwitting conflict or confusion. We	 there fore	 warn ourselves against venturing into the general law of real property except for minimal illumination thrown by rulings cited. In a large sense	 there are no absolutes in legal propositions and human problems and so	 in the jural cosmos of relativity	 our observations here may not be good currency beyond the factual legal boundaries of sales tax situations under a specific statute. The major plea to bomb the tax demand having been shot down by retroactive legislative missiles	 the respondent has sought a manouvre to victory by reliance on the contention covered by formulation No. 1 set out at the beginning. Point 2 hinges on the result of point No. 1 and deserves no separate discussion. 153 The High Court 's holding on these twin points is in favour of the respondent on the basic submission of non exigibility of tax on the score that the transactions in question are not sales at all and the payments not price of goods at all but mere royalty under a lease. A short legal survey will take us to an easy solution of this issue. Section 64A of the Sale of Goods Act enables the seller	 under certain circumstances	 to recover	 as sale price	 any sales tax which the vendor has had to pay. So	 if in the present case	 the Forest Department of the State is liable to pay sales tax on the bamboo. and salai wood cut and removed by the respondent	 the claim to recover it from the buyer is good under the said s.64A. The next logical series of questions are whether the Forest Department is liable to sales tax on the timber covered by demise ? Can the timber s0 extracted and the royalty paid at the rates stipulated be called goods and sale price respectively under Sec. 2(0) of the MPGST Act ? Can the levies made by the Forest Department become its turnover of sales under Sec. 2(t) ? Does removal of timber by the lessee constitute sale of goods under section 2(n) of the MPGST Act or section 64A of the Sale of Goods Act ? The ignition point which sets in motion the chain reac tion is the character of the transaction whereby bamboo etc. are cut and removed and money paid	 measured by the weight of the timber extracted. If it is a sale the tax is leviable from the Forest Department and the amount	 in turn	 recoverable from the lessee and vice versa. We must set out parts of the 'lease deed ' so that its basic structure and essential nature may be decoded. Is it really a lease of forest or is it a sale of certain timber with ancilliary licences ? No. doubt	 the deed styles itself a lease. But it is argued that a soi disant lease may well be a mere contract of sale of goods. Theoretical ly	 this is perfectly possible in law	 as in literature: 'What 's in a name ? that which we call a rose/By any other name would smell as sweet '! But what is there in the document to detract from the prima facie validity of the label ? Here the clarity of the reasoning lies in the correct approach t0 the question which is not so much whether the contract is one of lease but whether it works out a sale of goods under the two concerned statutes. Sales tax is payable by a dealer. The Forest Department	 by force of the statutory amendment	 is admittedly a dealer. Such tax is computed on the turnover as defined in section 2(t) of the MPGST Act	 which reads: "2. In this Act	 unless there is anything repugnant in the subject or context	 X X X X (t) 'turnover ' used in relation to any period means the aggregate of the amount of sale prices received and receivable by a dealer in respect of any sale or supply or distribu 154 tion of goods made during that period	 whether or not the whole or any portion of such turnover is liable to tax but after deducting the amount	 if any refunded by the dealer to a purchaser	 in respect of any goods purchased and returned by the purchaser within the prescribed period. " The essential ingredients of turnover are thus 'sale of goods ' and 'sale prices '. The latter concept has received definitional expression in s.2(0) and the former in s.2(n). They may be read here: "(o) 'sale price ' means the amount payable to a dealer as valuable consideration for the sale of any goods	 less any sum allowed as cash discount according to ' ordinary trade practice but including any sum charged for anything done by the dealer in respect of the goods at the time or before delivery thereof other than the cost of freight or delivery or the cost of installation when such cost is Separately charged and the expression 'purchase price ' shall be construed accordingly. (n) 'Sale ' with all its grammatical variations and cognate expressions means any transfer of property in goods for cash or deferred payment or for other valuable consideration and includes a transfer of property in goods involved in the supply or distribution of goods by a society or club or any association to its members	 but does not include a mortgage	 hypothecation charge or pledge	 and the word 'purchase ' shall be construed accordingly;" For all these words to apply	 the pivotal factor is 'goods ' which is defined in substantially similar manner in both the Sale of Goods Act and in section 2(g) of the MPGST Act which latter reads: "2 (g) "goods" means all kinds of movable property other than actionable claims	 newspapers	 stocks	 shares	 securities or Government stamps and includes all materials	 articles and commodities whether or not to be used in the construction	 fitting out	 improvement or repair of movable or immovable property; and also includes all growing crops	 grass	 trees	 plants and things attached to	 or forming part of the land which are agreed to be severed before sale or under the ' contract or sale;" The key expressions which unlock the mystique of turn over curesale of goods are the last inclusive limb of the clause 'also includes . trees which are agreed to be severed under the contract of sale '. The crunch issue thus is whether the self styled lease deed is in substance a contract of sale of timber. The true import of the document may be gathered from its terms	 not from rulings on other documents. There is a serious limitation on the service of case law in this area. It depends firstly on the actual issue in each case and the angle of vision adopted and secondly on the clauses	 pur poses and surrounding circumstances of each tran 155 saction. While	 therefore	 we may cite some rulings later we bear in mind the limits of their use. Shri Sen rightly stressed the importance of the deliber ate description of the deed as a lease. He drew our atten tion	 with emphasis	 to annual payments of royalty	 not price. Royalty has a slight fedual flavour with a tell tale demise relish	 if we may say so	 while price is a mercantile concept smacking of commercial relations. By the deed	 the forest lands of the lessor are 'hereby demised '. There are frequent references to the 'leased area '. The period of the lease is stated to be a long 20 years	 later substituted by 30 years. There is also refer ence to discharge of lease	 royalties	 compensation and other monies	 suggestive of a demise rather than of a sale. The provision for payment of a minimum royalty runs in these terms: lm15 "Provided that the minimum royalty payable by the lessees to the State Government during the first year of this lease shall not be less than 1.5 lakhs of rupees and for the next and subsequent years	 shall	 during the term of this demise	 be not less than two lakhs of rupees per annum. " Whether there is cutting of timber or not	 Shri Sen argues	 the minimum royalty has to be paid	 thus showing that the provision for payment is sometimes de linked from the ex ploitation of the forest or the value of the timber cut. Considerable reliance was placed for taking the document out of the category of mere sale of goods	 on clause 5 of the Deed	 which reads: "The lessees shall with the previous permission in writing of the State Government be at liberty to make dams	 cross streams	 cut canals	 make water course irrigation works	 construct roads	 railways and tramways and do any other works useful or necessary for the purposes of the business connected with these presents in or upon the leased area provided that they are in accordance with the plan approved by the State Government and also with the like approval to widen or deepen any existing creeks or channels of waterways for the purposes of the said business and all timbers required for the above purposes shall be allowed half royalty rates in the case of timbers of reserved species and free in case of timbers of unreserved species by the State Government. " There is also provision for renewal of the lease deed which savours	 again	 of a transaction of real property since renewals cannot obtain for sales. The face value of these features tends to fix the trans action as a lease but	 lift the veil and feel the reality behind	 Shri Shroff urged us	 only to discover that the lease is no more than a simple sale of goods	 viz.	 of bamboo and salai wood. He dismissed tags and labels as of the least consequence when the heart of the matter turned on the crucial terms of the document which were	 in his submis sion	 loudly 156 obtrusive of the 'sale of goods ' character of the transac tion. Of course	 if in essence there is a sale of goods covered by the deed	 we have to locate the taxing event which occurs when the title to the goods is transferred. The description of the document as a lease 'deed '	 the reference to royalty	 the right to construction of buildings etc.	 cannot hamper a contrary conclusion if there are luminous characterstics of a 'sale of goods '	 in what is but a lease deed in name. From this angle Shri Shroff has high lighted certain principal provisions in the deed. There is no doubt	 he says	 that if one scans the document closely	 one finds that possession of the land is not given; which means that parties have slurred over the demise part of it notwithstanding the dubious expressions used. What is authorised under the deed is the 'exclusive liberty ' to enter upon the leased area to fell	 cut or extract bamboos and salai wood and to remove	 store and utilise the same for meeting the full requirements of the Paper Mill. This reads more like a sale of standing timber coupled with a licence to enter and do certain things on another 's land. Counsel also emphasised that an insightful understanding of cl. 2(g) of the deed would bring out the price fixed for the goods sold viz.	 'a fiat rate of Rs. 6/ per ton on air dry bamboo and Rs. 2/ per ton on air dry salai wood . actually extracted and removed from the leased area on the weighment at the weighbridge of the said Paper Mill and in case of export at the weighbridge or weighbridges to be installed at suitable places by the lessees	 in which case the royalty shall be Rs. 7/8/0 (rupees seven and eight annas) and Rs. 2/8/0 (rupees two and annas eight) per ton of air dry bamboo and salai wood respectively. In this context supportive strength was sought to be drawn from cl. 2(h) which reads: "(h) The lessees shall keep an account of all bamboos and salai wood cut and removed in the manner as may mutually be settled and such account shah be open to inspection by the Forest Officer authorised in this behalf by the Divisional Officer concerned. " Shri Shroff went to the extent of saying that the real nature of the transaction was disclosed in the deed itself in clause 2(k): "(k) The lessees in conducting their operation on the leased area shall not in any way interfere with the surface of land save and in so far as may be necessary in connection with and for the purposes of this licence." Clause 4 bears on its bosom	 in his submission	 the imprint of a contract for sale of goods and it may be read: "4. "Without prejudice to the provisions of this lease	 the rights	 liberties and privileges of the lessees hereinbefore mentioned shall extend only to bamboos and salai wood within the leased area and nothing herein shall in any way be deemed to authorise the lessees to interfere with the working of the forest areas within the leased area or the rights	 liberties	 privileges of other contractors of the said forest lands. " 157 We are considerably impressed with this analysis. The upshot of the whole transaction is that	 for a price fixed	 bamboos and salai wood are permitted to be removed from the forest of the appellant by the respondent. For the exercise of the right under this contract	 certain necessary licences are conceded. It is made perfectly plain that the posses sion of the land qua land is not given	 and there is a fool proof provision that the rights of the 'lessees ' shall extend only to bamboos and salai woods within the leased area and nothing herein shall in any way be deemed to autho rise the lessees to interfere with the working of the forest area . of other contractors of the said forest lands. Can there be a lease without exclusive	 possession of the lands ? Can there be a lease to A of lands when the only right is to cut certain species of timber above a certain height and according to. stipulated conditions ? Can there be a lease of lands where similar right to cut timber from the same land co exist in other contractors ? There are mere circumstances than these	 but we need not be exhaus tive	 especially when we agree with the conclusion reached by the High Court. 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 severed	 the property passes. The 'Royalty ' is a feudalistic euphemism for the 'price ' of the timber. We may also observe that the question before us is not so much as to what nomenclature would aptly describe the deed but as to whether the deed results in sale of trees after they are cut. The answer to that question	 as would .appear from the above	 has to be in the affirmative. Now to a brief reference to two out of several cases cited at the Bar. Sri Sen relied heavily upon Raja Bahadur Kamakshya Narain Singh(1). That was a case under the Income Tax law. The assessee there received large payments by way of royal ty under various mining leases. The leases purported to be for 999 years and related to the coal mining rights set Out in the Schedule to the lease. The lessees were to pay a sum by way of salami or premium and an annual sum as royalty computed at a certain rate per ton on the amount of coal raised and coke manufactured. It was contended on behalf of the assessee that the sums received as salami and royalty did not constitute 'income ' but were capital receipts	 representing the price of the minerals removed. There was also a provision for minimum royalty which was pressed into service by the party. The Judicial Committee held that the royalty payable under the lease was not the price of the actual coal extracted but represented compensation which the lessees paid to the lessor for that species of occupa tion which the contract allowed and it was therefore 'in come ' from other sources ' within the meaning of the relevant Income tax Act. We must point that the legal setting in which a question is considered colours the ratio of the case. The Judicial Committee was considering an issue arising under the Income Tax Act and	 interpreting the clauses of a deed with particular terms	 to ascertain wheth er the payments made thereunder fell within the meaning of 'income ' understood in its broadest connotation [1943] 11 .T.R. 513. 158 in England and in India. Construing	 as we do	 a special statute and a differently worded deed and the signification of the words used therein we are unable to draw any legiti mate instructional inferences from a decision contextually different	 concerned with a different branch of law; and dealing with different issues although with seeming resem blances in superficial respects. Another decision which	 perhaps	 has some helpful reasoning	 is by this Court in Badri Prasad(1). We need not discuss the details of that case except to point out that it has been recognised	 in that ruling	 that trees which are to be severed before sale or under the contract of sale are 'goods ' for the purposes of the Sales of Goods Act. On the facts of that case	 property in the cut timber could pass to the plaintiff under the contract at the earliest when the trees were felled but before that happened the trees had vested in the state under an agrarian reform measure. The crutches of case law are not always necessary in Court. While direct light on the legal situation present before us is not available from Badri Prasad	 or 'Kamakshya Narain Singh	 (supra) there is not the slightest doubt that going by the definition of 'sale of goods ' under 8. 2(7) of the Sale of Goods Act and of s.2(g) of the MPGST Act	 stand ing timber is 'movable property ' if under the contract of sale they are to be severed. But the severance must take place when the timber still vests in the contracting party. Ultimately	 the case before us has to. be decided on the facts and the law which form the backdrop to the deci sion. We have already held that the crucial fact to be found before we can designate the transaction as 'sale of goods ' is to scan and see whether the 'lease deed ' really deals with sale of timber. We are clear that there is sale of bamboo and salai wood under the contract and	 in the contemplation of the parties they are to be cut and severed	 pursuant to the contract itself. It follows that the find ing of the High Court on this point is correct. The appeal deserves to be allowed on account of the statutory amendment. The Madhya Pradesh Legislature had taken great care and responded with prompt attention to deal with a situation where considerable revenue would be lost to it on account of inadequate expression of its intendment in the MPGST Act. A diligent and considered amendment has fulfilled the legislative purpose. Had the State lost the appeal before Us on another point	 that is as to whether royalty was 'price for sale of goods '	 the whole amendatory effort would have been an exercise in futility or a legisla tive brutum fulmen. In view of our finding that there is a 'sale of goods ' under the contract	 the State is entitled to succeed. Counsel for the respondent	 when we briefly indicated our mind	 and even otherwise by way of abundant caution	. rightly urged that his client had a good case for reduction of the quantum of tax even if sales tax was payable by the Forest Department which could be shift (1) ; 159 ed to the respondent by virtue of s.64A of the Sale of Goods Act. He prayed for an opportunity to establish that he was being called upon to foot a larger bill than was legally tenable. We regard this a reasonable request and	 indeed	 Shri Shroff	 for the State	 has very rightly agreed with this prayer of the respondent. For one thing	 the amending Bill whereby the liability was being de novo fastened was enacted into law after the judgment of the High Court. Read with s.82 of the Indian Forests Act	 the amount was being recovered as if it were land revenue. This process deprived the respondent of his right to challenge the quantification of the tax. It is fair and the State agrees to be fair that the respondent should be enabled to prove his case that the sum claimed was much higher than could be legitimately recovered. Shri B. Sen brought to our notice that the rate of tax on sales to a registered dealer	 if the commodity was to be consumed within the State	 in view of Section 8 of Madhya Pradesh General Sales Tax Act for manu facturing purposes was less than the general rates. The appellant	 on the other hand was seeking to recover at the higher rate. Moreover	 even the lesser rate varied over the years from 1% to 2% and on to 3 %. Thus the arithmetics of the case had also to be gone into before the actual sum due from the Forest Department to the Sales Tax Department was fixed. More could not be exacted from the respondent. These reasons persuade us to allow the appeal and remand the case for consideration of the quantum of tax that the State	 in the Forest Department	 was legally liable to pay as a dealer	 to the Sales Tax Department. Shri Shroff took up a point that when the Forest Depart ment made a demand on the respondent and required him to furnish a declaration necessary to reduce the rate of tax	 the latter ignored the request. This	 according to him	 had an impact on the eventual liability. We do not propose to investigate this aspect at the present stage but leave it to be raised by the State before the High Court. In this view	 we allow the appeal and remand the case for disposal after recording a finding on the limited issue/issues above indicated. We may mention that although the High Court has not properly adjudicated upon the recov erability of the Sales Tax as and by way of arrears of land revenue	 it is not necessary to go into the matter afresh especially because once the tax amount is settled	 the payment by the respondent will follow. However	 we are not upsetting the finding of the High Court in this behalf in the present case. The appeal is allowed and remanded	 to be disposed of in the light of the directions given above. Parties will bear their costs throughout. P.B.R. Appeal allowed.

Summary:
The appellant entered India on May 9	 1956	 on a Pakistani passport. He had a visa permitting him to stay in India for three months. He had to leave India on or before August 8	 1956. As he failed to do so	 a notice under section 3 (2) of the 	 as amended in 1957	 was served on him on November 19	 1959	 by the Delhi Administration. As he did not comply with the requirements of the notice	 he was prosecuted under section 14 of the and convicted. His appeal and revision were dismissed. All came to this court by special leave. His contention was that he was not a foreigner within the meaning of the definition of a foreigner as it existed at the time he entered India	 and he was not a foreigner even under the amended definition. Held	 that the appellant was a foreigner under the amended definition and he had committed a breach of the order served on him after the amended definition of foreigner came into force. In disobeying the directions given to him by the Delhi Administration	 he had committed an offence within the meaning of section 14 of the . Before the amendment of the definition in 1957	 a person born within His Majesty 's Dominion and owing allegiance was a citizen of India	 but after the amendment in January	 1957 a person who was not a citizen of India became a foreigner. After that date	 if an order was issued by the Central Government in exercise of powers conferred on it under section 3 of the Act	 it was the duty of such a foreigner to obey that order and if he did not do so	 he committed an offence within the meaning of section 14 of the Act. The appellant was certainly not a foreigner when he entered India	 but in view of the amendment of the definition	 he became a foreigner after January 19	 1957. He could not be convicted for an offence for an act done by him before the amendment on the 561 basis that he was a foreigner	 but in the present case he had been punished for not complying with an order passed after the amendment. The burden of proving that he was not a foreigner was on the appellant and he had failed to discharge that burden. The legality of an act done by a person must be judged on the basis of the existing law at the time the act is done. Union of India vs Ghaus Mohammad	 ; followed Fida Hussain vs State of Uttar Pradesh 11962] 1 S.C.R. 776	 distinguished.