TITAGHUR PAPER MILLS COMPANY LTD Vs. STATE OF BIHAR

JUDGEMENT

(1.) An agreement has been entered into between the Governor of Bihar and the petitioner. A copy of this agreement (date whereof is not mentioned) is annexure P/1. The agreement is styled as "agreement for long term bamboos lease on royalty payable on bamboo yield". The root questions involved in this application are (a) whether the agreement is a lease or licence; (b) whether the sales tax and cess tax are payable on the amount of "royalty on bamboo yield basis"; and (c) whether the notification of the State Government dated 26th December, 1974 (annexures P/17 and P/18), is legal and valid?

(2.) In order to appreciate the contentions raised in this application it may be necessary to give some more facts leading to the filing of the writ application.

(3.) The Divisional Forest Officer wrote a letter (annexure P/l) to the petitioner on 16th December, 1975, stating that sales tax was payable at 81/2 per cent on the first, second and third instalments of the royalty. The petitioners were therefore asked to pay the amount due within fifteen days of the letter. Another communication dated 31st May, 1976 (annexure P/3), was addressed to the petitioner requiring it to pay the arrears of royalty plus sales tax at 81/2 per cent on certain amount and 9 per cent on some other amount. It also informed the petitioner that the petitioner was liable to pay cess tax on sales of bamboo at 3 per cent. The petitioner received another letter dated 12th July, 1976, stating that the amount of Rs. 50,000 paid by the petitioner under a bank draft dated 25th June, 1976, was being adjusted towards part-payment of royalty, payment of sales tax at 9 per cent and part-payment of cess tax. It also informed the petitioner that if the petition submitted by the petitioner in respect of sales tax and cess tax is decided by the higher authorities in its favour, the amount would be adjusted towards the balance due in respect of the "old lease". A representation (annexure 5) was filed by the petitioner to the Commissioner of Commercial Taxes (Finance), Government of Bihar, contending, inter alia, that the sales tax and cess tax were not payable. There has been communication between the parties on the subject which need not be referred to. Thus, the position is that the stand of the State is that the aforesaid taxes are payable, whereas the petitioner says that they are not. It may, however, be stated that the petitioner has paid a sum of Rs. 56,051 under protest.