- (1.) THIS is a petition under Articles 226 and 227 of the Constitution to call up and quash by certiorari- (i) a communication dated 2nd September, 1968, sent by the Divisional Forest Officer, North Shahdol Division (respondent 3) requiring the petitioner to pay as sales tax Rs. 24,455. 30 in respect of extractions made by it from the forests of the aforesaid division of bamboos during the years 1962-63 to 1966-67 and of salai wood during the years 1962-63 to 1967-68; (ii) another communication dated 9th September, 1968, sent by the same officer to the Additional Tahsildar, Sohagpur (respondent 5) asking him to recover the amount as arrears of land revenue; and (iii) a notice of demand dated 19th September, 1968, sent by the respondent 5 for that amount. The petitioner has also prayed for a writ of prohibition or any other suitable writ or order directing the respondents to desist from demanding or recovering any sales tax in respect of extraction of bamboos and salai wood from the forests of the division.
(2.) THE broad facts of the case are not in dispute and may be shortly stated. By an instrument of lease dated 4th August, 1956, the President of the Union, acting on behalf of the quondam Part C State of Vindhya Pradesh, authorised the petitioner to extract from certain forests bamboos and salai wood on terms and conditions therein stated, including payment of royalty at certain rates on the bamboos and salai wood so extracted. Consequent upon the formation of the new State of Madhya Pradesh in accordance with the provisions of the States Reorganisation Act, 1956, all rights and liabilities relating to this transaction devolved upon the new State of Madhya Pradesh. When the lease was granted, the C. P. and Berar Sales Tax Act, 1947, was in force in the State of Vindhya Pradesh and the definition of "goods" in Section 2 (g) of that Act, as modified and in force in that State, excluded from the purview of the Act forest contracts that gave a mere right to collect timber, wood or forest produce. Subsequently, the Madhya Pradesh General Sales Tax Act, 1958, was enacted, and it came into force in the whole of the new State of Madhya Pradesh from 1st April, 1959. The exclusion of forest contracts from the ambit of the 1947 Act was not re-enacted in the new Act. Further, "dealer" as defined in the new Act includes the Central Government or a State Government or any of its departments. The forest department of the State Government was, however, exempted from payment of sales tax for the period 1st April, 1959, to 2nd November, 1962. So, it became thereafter liable to pay the tax and it got itself registered as a dealer with effect from 3rd November, 1962. The Divisional Forest Officer claimed to be entitled as a dealer to recover the sales tax for two reasons. In the first place, the transaction was in substance one of sale of goods taxable under the new Act. Secondly, this was a new imposition made subsequent to the creation of the lease on 4th August, 1956, when, as indicated earlier, the transaction was not taxable. In such a situation, so it was claimed, the provisions of Section 64a of the Sale of Goods Act, as inserted by Act 33 of 1963, entitled the Divisional Forest Officer to recover the sales tax subsequently imposed on such transactions.
(3.) THE petitioner has challenged the right of the respondents to recover sales tax on bamboos and salai wood extracted by it mainly on the following grounds: (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 4th August, 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. (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. ;