COMMLSSIONER OF AGRICULTURE INCOME TAX WEST BENGAL Vs. ANNAPURNA FIRMING AND FISHERIES LTD
LAWS(CAL)-1960-1-23
HIGH COURT OF CALCUTTA
Decided on January 22,1960

COMMLSSIONER OF AGRICULTURE INCOME TAX WEST BENGAL Appellant
VERSUS
ANNAPURNA FIRMING AND FISHERIES LTD Respondents

JUDGEMENT

- (1.) THE principal question which arises for consideration in this Reference is what was the date of sale of 441 maunds of paddy belonging to the assessee. According to the assessee the sale took place in the year 1356 B. S. , or to be more precise, on February 12, 1950. According to the Commissioner of Agricultural Income Tax the sale took place on June 23, 1950, the corresponding Bengali year being 1357. If the sale be held to have taken place on the date alleged by the assessee, the price of paddy sold by it will be Rs. 7-8-0 per maund under rule 4 (1) of the Rules framed under the Bengal Agricultural Income Tax Act which provides that if the agricultural produce is sold in the market, the market value shall be deemed to be the price for which it was sold. If, on the other hand, the sale be held to have taken place on June 23, 1950, the price of paddy will be calculated at the rate of Rs. 11/- per maund under rule 4 (2) of the Rules framed under the Bengal Agricultural Income Tax Act, which provides that if the agricultural produce has not been sold in the market, the market value shall be deemed to be the average price at which such produce has been sold in the locality during the previous year in respect of which the assessment is made.
(2.) THE facts upon which this controversy has arisen are as follows. The assessee which carries on business in agricultural farming and fisheries entered into a contract for sale of 2,250 maunds of paddy with a rice mill named Bajrang Rice Mill on December 19, 1949, corresponding to the month of Pous, 1356. The price at which the paddy was agreed to be sold was the Government Procurement rate of Rs. 7-7-0 per maund. It is provided in this agreement that the buyer is to supply boats for the transport of paddy, but the loading charges will be borne by the seller and that delivery will be given as soon as the threshing of paddy was completed. It is admitted that in pursuance of this agreement the assessee gave delivery of 1,812 maunds of paddy on February 12, 1950, but delivery was given of the balance of 441 maunds on June 23, 1950. The Agricultural Income Tax Officer in his assessment order held that the sale of 441 maunds of paddy took place not on February 12, 1950 but on June 23, 1950 and, therefore, the price of the aforesaid quantity should be calculated at the average market rate according to rule 4 (2) (a) at the rate of Rs. 11/-pcr maund, because, in the opinion of the Agricultural Income Tax Officer, the average upon market rate of paddy at the relevant time was Rs. 11/- per maund. Against this order the assessee took an appeal to the Assistant Commissioner, Agricultural Income Tax. According to the decision of the Assistant Commissioner the property in the goods passed to the buyer on, June 23, 1950 as held by the Agricultural Income Tax Officer, but in his opinion the market value should be determined by the Government Procurement rate of Rs. 7/8/0 per maund following certain principles which were laid down by the Appellate Tribunal Agricultural Income Tax, in another case. Against the decision of the Assistant Commissioner, Agricultural Income Tax, the Department took an appeal to the Appellate Tribunal. The Appellate Tribunal has held that (a) the entire quantity of paddy including 441 maunds agreed to be sold by the assessee was ready for delivery on February 12, 1950; (b) admittedly, the purchaser took delivery of 1,812 maunds of paddy on February 12, 1950 ; (c) it was nobody's case that the delivery of the total quantity of paddy was to be given by installments nd (d) neither the buyer nor the seller had any intention of severing the paddy, which was delivered on February 12 1950, from the entire quantity to be sold. Upon these findings the Tribunal came to the conclusion that though the delivery of 441 maunds of paddy took place on June 23, 1950, by the operation of section 34 of the Sale of Goods Act, property in the whole of the goods had passed to the buyer on February 12, 1950. Consequently, the sale was completed on February 12, 1950, though the delivery of 441 maunds took place on a later date. Upon this view the Tribunal held that the market value of the 441 maunds of paddy which were delivered on June 23, 1950 should be calculated at the rate stipulated in the agreement for sale. The Tribunal further held, in the alternative, that even if the sale be held to have taken place on June 23, 1950, the Department would not succeed, because the market value would have to be calculated at the Government procurement rate of Rs. 7-8-0 per maund. In this view of the matter, the Tribunal dismissed the appeal filed by the Department and upheld the order of the appellate Assistant Commissioner. I ought to mention that there was also another small point on which there was a controversy between the assessee and the Department and that related to the allowance of a sum of Rs. 146/- representing the fee paid by the assessee to its Auditor. The Agricultural Income Tax Officer disallowed this amount, but the appellate Assistant Commissioner allowed it and that decision was upheld on appeal to the Tribunal.
(3.) AGAINST the order of the Appellate Tribunal, the Commissioner of Agricultural Income Tax has obtained this Reference and the questions of law which have been referred to this Court by the Tribunal are as follows:- (I) "whether on the facts and in the circumstances of the case the Appellate Tribunal was justified in holding that the property in 441 maunds of paddy in dispute passed to the Bajrang Rice Mill in 1356 B. S. though actually delivered in 1357 B. S. and that the sale of the said quantity of paddy took place in 1356 B. S. , that is, accounting year, at Rs. 7-7 per maund. " (II) "whether on the facts and in the circumstances of the case the Appellate Tribunal was justified in holding that even on the assumption that 441 maunds of paddy in dispute was sold in 1357 B. S. , the said quantity of paddy was to be valued not at Rs. 11, being the value calculated according to the average open market price at which such produce had been sold in the locality in 1356 B. S. , but the price at which the said quantity of paddy was actually sold in 1357 B. S. " (III) "whether on the facts and in the circumstances of the case the Appellate Tribunal was justified in allowing under section 7 (9) of the Bengal Agricultural Income-tax Act a sum of Rs. 146 out of Rs. 150 paid as auditor's fee. ";


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