S. K. DAS, J. : - (1.) THE following Judgment of the court was delivered by
(2.) THIS is an appeal on a certificate granted by the High court of orissa. The appellants are the State of orissa and the Collector of Commercial Taxes, orissa. The respondent is a partnership firm called Messrs. Chakobhai Ghelabhai and Company dealing in ` bidi ' leaves. The short facts are these. The respondent firm' has its headquarters in Bagbehera in Madhya Pradesh. During the years 1948 to 1951 it was engaged, in collecting ' bidi' leaves from certain forest areas in orissa. The leaves so collected were made up into bundles and stored in the respondent's godowns in orissa. They were then sold and dispatched to various destinations outside the State of orissa. The respondent did not get itself registered as a dealer under the orissa Sales Tax Act, 1947 (orissa Act XIV of 1947), hereinafter called the Act. On 21/07/1950, a notice was issued to the respondent by the Assistant Sales Tax Officer, Patna Circle, requiring it to submit a return in Form No. IV showing separately the particulars of its turnover for each of the quarters commencing October, 1947, and upt upto 30/06/1950. The respondent was also asked to show cause why a penalty should not be imposed on it under s. 12(5) of the Act. To this notice the respondent sent a reply to the effect, substantially, that it carried on no selling business in orissa and was, therefore tinder no liability to register itself as a dealer in orissa or to pay sales tax under the Act. Thereafter, the respondent took no part in the assessment proceedings and made no appearance before the assessing authority except on 30/06/1951, when one of its partners Narvaram Popatbhai appeared and said that the accounts were at Bagbehera and the dispatches of 'bidi' leaves from orissa were mixed up with other dispatches and, therefore, he was not in a position to give a correct account of the business in orissa. It was admitted, however, that the 'bidi ' leaves were collected in orissa, were processed and manufactured for sale and then stored in godowns in orissa; they were then sold and dispatched to different customers outside orissa. The assessing authority held on the materials before it that the transfer of property in the 'bidi ' leaves sold and dispatched to customers as aforesaid was completed in orissa and the respondent wailfully. failed to get itself registered and to submit a return of its turnover. The assessing authority then proceeded to assess the tax to the best of its judgment and determined the taxable turnover to be Rs. 61,250.00 for each of the twelve quarters, the first quarter ending on 30/06/1948, and the last quarter ending on 31/03/1951. It also imposed a penalty of Es. 500 for each quarter. The orders of assessment were made on two dates-on 4/07/1951, for four quarters and on 29/08/1951, for the remaining eight quarters. Against these orders of assessment the respondent went up in appeal to the Assistant Collector of Sales Tax, Sambalpur. One of the pleas taken before the appellate authority was that the respondent was not a dealer in orissa inasmuch as the sales of ' bidi ' leaves were not effected in orissa. In the course of the hearing of the appeal this plea. was given up, and it was admitted by the respondent's pleader that `the sales were completed in orissa `. The appeal was then heard on the contentions that (1) the turnover determined was excessive, and (2) that no penalty should have been imposed. These contentions were rejected by the appellate authority. The respondent then moved in revision, but the revision petition having been filed out of time was rejected by the Collector of Commercial Taxes, orissa. The respondent then moved the High court of orissa by means of a writ petition in which it was contended that (1) the respondent was not a dealer in orissa; (2) that the sales of the post-Constitution period were sales within the meaning of the Explanation to Art. 286(1)(a) as it then stood and orissa could not tax them ; (3) that the notice under s. 12(5) of the Act was bad on various grounds; (4) that the fees levied under rule 59 of the orissa Sales Tax Rules, 1947, on the respondent's 'Memorandum of appeal and revision application, were not justified in law; and (5) that the assessment was illegally made and so also the penalty under s. 12(5) of the Act. On these contentions the respondent asked for a writ quashing the assessment proceedings and the notices of demand and for a direction for a refund of the fees paid. The High court allowed the petition by its Judgment and order dated 5/09/1955. It set aside the assessment orders, directed a refund of the fees paid and further made an order that the respondent shall be directed ` to furnish a return of its transactions under, s. 11 for the period for which it had been served with a notice under s. 11(1) of the Act `. In support of its orders the High court came to the following findings: (1) that the assessment orders were bad because of the repeal of the second proviso-to s. 2(g) of the Act defining `Sale`, by the Adaptation of Laws Order, 1950; (2) that the levy of fees on a graded scale amounted to the imposition of a tax which was unwarranted and beyond the rule making power of the State government; and (3) that the notice issued under s. 12(5) was not in accordance with law.
(3.) ON behalf of the appellants it has been contended that the High court was in error in respect of all the three findings at which it had arrived. As to the finding of the High court that the assessment orders were bad because of the repeal of the second proviso to s. 2(g) of the Act, we think that the High court was clearly in error. In view of the admission made on behalf of the respondent, it was quite unnecessary to deal with the second proviso s. 2(g) of the Act or to consider the effect of its repeal by the Adaptation of Laws Order, 1950, or the effect of the saving clause in paragraph 20 thereof. The admission on behalf of the respondent, made in very clear terms as recorded by the appellate authority, was that the sales were completed in orissa. Section 2(g) of the Act states: `S. 2(g)-` sale ` means, with all its grammatical variations and cognate expressions, any transfer of property in goods for cash or deferred payment or other valuable consideration, including a transfer of property in goods involved in the execution of contract but does not include a mortgage, hypothecation, char or pledge.` The admission made in this case clearly brings the sales of 'bidi' leaves within s. 2(g) of the Act; and as the sales were completed in orissa, they were liable to tax under the Act. It was quite unnecessary to go to the second proviso to s. 2(g) in view of the admission of the respondent. Learned Counsel for the respondent suggested that the admission made by the respondent's pleader was an admission on a question of law and, therefore, not binding on the respondent. We do not agree. The question where a sale is completed depends on facts and is not a pure question of law. It is worthy of note, that at no stage subsequent to the admission did the respondent repudiate it or challenge its correctness. Even in the writ' petition it was not stated that a wrong admission had been made; on 'the contrary the appellate authority's order in which the admission was set out was an Annx. to the writ petition. It is indeed true that is paragraph 13(a) of the writ petition a contention was raised with regard to the sales of the post-Constitution period and a reference was made to the Explanation to Art. 286(1)(a) as it then stood. But the necessary averments to attract the Explanation were not made, and nowhere was it ated that the goods were dispatched outside orissa for the purpose of' consumption in the delivery State. In other words, no foundation was laid for making a distinction between the pre-Constitution and post-Constitution sales, and with regard to all of them it was admitted that they were completed in orissa-an admission which was never repudiated or challenged. We are, therefore, of the opinion that the High court, was clearly in error in its first finding as to the unconstitutionality of the assessment orders made.;