A. K. MATHUR, J. - (1.) THIS revision petition is directed against the order dated 20th February, 1986 passed by the Rajasthan Sales Tax Tribunal, Ajmer (hereinafter referred to as "the Tribunal" ). The brief facts giving rise to this revision petition are that the petitioner-assessee is registered dealer. He was given a contract by the Panchayat Samiti, Sumerpur, to exclusively collect bones in its area on payment of Rs. 7,500. The petitioner-assessee was also given a contract by the Forest Department to recover anwal chaal on payment of Rs. 2,000 for a period of one year. Both the departments, namely, Panchayat Samiti as well as the Forest Department, are registered dealers. The sales tax was to be deposited by the respective departments on these sales. At the time of assessment, it was found that the assessee has not paid the tax on the sales made by him to the individual consumers of the bones and the chaal. Thereafter, the assessee was levied with the tax on the total turnover by the assessment order of the Assistant Commercial Taxes Officer, Ward C, Pali. Aggrieved against this assessment, the assessee approached the appellate authority and the learned Deputy Commissioner (Appeals), Commercial Taxes, Jodhpur, accepted the plea of the assessee and set aside the demand of sales tax raised by the Assistant Commercial Taxes Officer, Pali. Aggrieved against this order, an appeal was preferred by the Assistant Commercial Taxes Officer, Pali, before the Rajasthan Sales Tax Tribunal, Ajmer. The learned Member, Tribunal, accepted the State appeal and relying upon the decision of the Madhya Pradesh High Court in Anandilal Naraindas v. Commissioner of Sales Tax, M. P. , Indore [1968] 22 STC 19 held that the department is not liable to pay the tax, but the assessee is liable to pay the tax on his turn-over. Aggrieved against this order of the Tribunal dated 20th February, 1986 the assessee has approached this Court by filing the present revision petition.
(2.) MR. Mehta, learned counsel for the petitioner, submitted that section 5 relates to charging of tax and it lays down that tax payable by a dealer under this Act shall be at such single point in the series of sales by successive dealers as may be prescribed and shall be levied at such rate notified by the Government in the Official Gazette. The Government has notified that the tax payable under section 5 of the Act shall be at the first point in the series of sale by successive dealers under rule 15 of the Rajasthan Sales Tax Rules, 1955. Rule 15 of the aforesaid Rules reads as under : " 15. Point of taxation.- Unless otherwise directed by the State Government by a notification in the Official Gazette, the tax payable under section 5 of the Act shall be at the first point in the series of sale by successive dealers. Explanation.- For the purpose of this rule, the first point in the series of sale shall mean the first sale in such series by a registered dealer and the second and subsequent points shall be determined accordingly while the last point in the series of such sale shall be the last sale in such series to an unregistered dealer or to a consumer or to a registered dealer for purposes other than resale within the State or in case of goods specified by the State Government, the last point in such series shall also be the last sale to a registered dealer in whose registration certificate such goods are recorded for resale by him to an unregistered dealer or a consumer. " According to rule 15, the tax is leviable at the first point in the series of sale by successive dealers. Learned counsel submitted that in the present case, the Panchayat Samiti and the Forest Department have entered into a contract with the assessee and they sold out their exclusive right to recover the bones and chaal in favour of the assessee and accepted the said sums in lieu thereof. According to the learned counsel, both the departments are registered dealers and they have accepted the consideration and sold out the right to the assessee to recover the bones in the Panchayat Samiti area as well as gave the right to the assessee to collect the chaal for a period of one year. According to the learned counsel, the sale has taken place and it is open for the assessee to collect the bones and chaal and then make successive sales. But in view of rule 15 of the aforesaid Rules, the first sale was made by the department and the department is a registered dealer and has also paid the tax as such. As against this Mr. Bhansali, learned counsel appearing for the Revenue, has submitted that as a matter of fact, no sale has taken place. They have only given the right to collect certain things to the assessee. Learned counsel further submitted that sometimes the bones and chaal may not be available, therefore, the first point in the series of sale in the present case shall be at the time when the goods were sold to the consumer in the market. I have considered the rival contentions of both the learned counsel and I am of the view that in terms of rule 15 of the Rules the first point sale took place at the moment when the Panchayat Samiti and the Forest Department entered into a contract with the assessee giving him the right to collect the bones and the chaal lying in their respective areas. The point whether the chaal or bones are readily available in the area is irrelevant, as both the parties have surrendered their right in favour of the assessee for certain consideration, therefore, between these two parties a sale has been effected by virtue of the present contract and the subsequent sales by the assessee will not be liable to tax. Under rule 15 of the aforesaid Rules the tax is payable at the first point in the series of sale by successive dealers. Therefore, the departments are liable to pay tax at the point they contracted with the assessee for a consideration to recover the bones and chaal and on that consideration, according to the practice, the department has already deposited the tax. It is true that the department is getting a very poor tax on the contracted sum, whereas if the department is permitted to levy tax on the turnover of the assessee, then perhaps the amount of tax would be much more. But the taxing statute has to be construed strictly and as per rule 15 of the aforesaid-Rules the tax has to be on the first point and the first point in the series of sale is the contract between the department and the assessee. Therefore, the first point tax will be leviable on the sale between the authorities and the assessee. I am fortified in this connection by a judgment of their Lordships of the Supreme Court in State of Madhya Pradesh v. Orient Paper Mills Ltd. [1977] 40 STC 603. In somewhat identical situation, a forest contract was given to the assessee and he was given a right to extract the bamboo and salai wood from the forest. A similar question arose as to whether the so-called lease which was ultimately found to be a licence, the tax liability should be on the total turnover of the assessee or at the first point when the contract was entered into. After considering over the matter, their Lordships of the Supreme Court ultimately came to the conclusion that the tax will be leviable at the time when the actual licence was given to the assessee, though the case was decided in favour of the State of Madhya Pradesh on account of subsequent amendments brought about in the Act. It was observed as under : " 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. '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 appeal from the above, has to be in the affirmative. " Applying the principle laid down by their Lordships of the Supreme Court, in the present case, since the right has been given to the assesses to collect the bones and the chaal that amounts to a sale at the first point and tax is leviable at this first point. The departments, i. e. , panchayat Samiti, Sumerpur, and the Forest Department, are liable to pay tax on this first point. In this view of the matter, the view taken by the Tribunal is not correct and deserves to be set aside.
(3.) IN the result, the revision petition is allowed and the order passed by the Tribunal on 20th February, 1986 is set aside. The parties are left to bear their own costs. Petition allowed. .;