Arijit Pasayat, J. - (1.) APPELLANTS-State of Orissa and the Orissa Forest Department Corporation Ltd. (in short the 'Corporation') in these appeals call in question legality of the judgment rendered by a Division Bench of the Orissa High Court allowing the writ petitions filed under Article 226 of the Constitution of India, 1950 (in short the 'Constitution').
(2.) WRIT petitions were filed by the respondents on the plea that the transactions between them and the Corporation were in course of inter-State trade and, therefore, only sales tax under the Central Sales Tax Act, 1956 (in short the 'Central Act') and not the Orissa Sales Tax Act, 1947 (in short the 'State Act') was leviable. Accordingly, prayer was made for a declaration that levy and collection of tax under the State Act was unauthorized, without jurisdiction and the excess amount collected from them under the guise of State sales tax should be refunded. Background facts as presented by the appellants are as follows: The respondents have their registered office outside the State of Orissa. They carry on business in tobacco and kendu leaves. They prepare bidi at factories situated in the State of West Bengal. The Corporation is a Government of Orissa Undertaking. Trade in Kendu leaves in the State of Orissa is a State monopoly and, therefore, is being transacted by the Corporation which sells processed and Phal kendu leaves by way of tender and auction every year. The writ petitioners had registered both under the West Bengal Sales Tax Act, 1994 (in short the 'West Bengal Act') and the Central Act. As usual, the Corporation issued tender notice for sale of processed and Phal kendu leaves for the year 2000-2001 and invited sealed tenders from purchasers duly registered with it. All the writ petitioners were registered purchasers with the Corporation and they submitted tenders which were duly accepted. They also entered into agreements with the Corporation. After the sale of kendu leaves and payment of the sale value, lifting orders were issued by the Corporation to its respective Divisional Managers permitting the purchasers to lift the goods. Thereafter, the concerned Divisional Forest Officer issued transport permit in the prescribed form on the basis of which the writ petitioners transported the kendu leaves to their places of business in the State of West Bengal. According to the writ petitioners the sale and purchase of kendu leaves are deemed to have taken place in course of inter-State trade because the sale/purchase had occasioned the movement of kendu leaves from the State of Orissa to the State of West Bengal and as such it is exigible to central sales tax under the Central Act and not local Act i.e. State Act. The plea was resisted by the State. According to it the levy of sales tax under the State Act was justified. To similar effect was the stand of the Corporation.
(3.) THE High Court referred to various provisions of the Orissa Kendu Leaves (Control of Trade) Act, 1961 (in short the 'Kendu Leaves Act') under which the State of Orissa has assumed monopoly of trading kendu leaves. Rules framed thereunder are known as Orissa Kendu Leaves (Control of Trade) Rules, 1962 (in short 'Central Rules'). It was noted by the High Court that Section 3(2)(b) of Kendu Leaves Act lays down that notwithstanding anything contained in Sub-section (1), leaves purchased from government or any officer or agent specified in the said sub-section by any person for manufacture of bidis within the State or by any person for sale outside the State may be transported by such person outside the unit under a permit to be issued in that behalf by such authority as may be prescribed and the permits so issued shall be subject to such conditions as may be prescribed. THE High Court also referred to Rule 5-B which deals with disposal of kendu leaves. Particular reference was made to Sub-rule (10) and Sub-rule (11) of the said Rule. Under Sub-rule (11) the purchaser is required to execute an agreement in the prescribed form 'H' within 15 days from the date of receipt of an order relating to his selection as purchaser failing which the said order of selection shall be liable to be cancelled. Sub-rule (13) provides that purchaser shall take delivery of kendu leaves from such depots or stores as indicated by the Divisional Forest Officer during the agreement. Rule 6 deals with grant of transport permit. THE High Court relied upon the said Rule for its conclusion that the transactions were in the nature of inter-State trade. Reference was made to Sub-rule (1) of Rule 6 which lays down that an application for issue of permit under Section 3(2)(b) of the State Act in the prescribed form 'C' has to be made to the Divisional Forest Officer. THE High Court found that the writ petitioners were purchasers duly registered with the Corporation. THEy have submitted their tenders pursuant to the tender of notice. THEir bids were accepted pursuant to which in each case agreement was executed. As an instance regarding the nature of the transaction, reference was made to the factual position in OJC 9724/2000 filed by Ashok Bidi and Anr. In that case it was noted that the Divisional Manager of the Corporation, Balangir Division in his letter dated 13.11.2000 wrote to the Sub Divisional Manager, Padampur Sub Division, requesting him to give delivery of the stock to writ petitioner No. 1 on receipt of the transport permit from the Divisional Forest Officer, Kendu Leaf, Padampur. In the copy which was forwarded to the Divisional Forest Officer, Kendu Leaf, Padampur Division, the Divisional Manager requested him to issue necessary transport permit in favour of the writ petitioner. THE challan indicates that the goods were to travel from Mithapali in Orissa to Aurangabad in West Bengal. THE transport permit also noted the destination. It was, therefore, concluded by the High Court that kendu leaves can only be delivered after submission of necessary transport permit and the sale can only be completed after delivery of the goods, that is to say, after the goods have been directed to move to the definite place as mentioned in the transport permit. Such permits clearly indicate the destination and also checking and examination at check gates in between the point of despatch and destination so as to avoid diversion of the goods. It was, therefore, concluded that the pre conditions essential for a sale in course of inter-State trade were satisfied and the transactions have to be held as inter-State sale within the meaning of Section 3(a) of the Central Act. THE writ petitions were accordingly allowed. In support of the appeals, learned Counsel for the appellants submitted that unnecessary stress has been laid by the High Court on the transport permit. They submitted that even in case of intra-State trade, the transport permits were required. There was in each case an agreement with the Corporation and nowhere it stipulates that the goods could only be taken outside the State. After the sale was completed in the State of Orissa, the purchaser was free to take it to any destination.;