LexSTATE OF ORISSA & OTHERS versus THE TITAGHUR PAPER MILLS COMPANY LTD. & ANR.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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STATE OF ORISSA & OTHERS
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THE TITAGHUR PAPER MILLS COMPANY LTD.
&ANR.
March I, 1985
(V.D. TULZAPURKAR, AMARENDRA NATH SEN AND
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D.P. MADON, JJ.]
Ori.1sa Sale~ Tax Act 1947-Sec!ions 38 and 5 (!)-Scope of-Notifications
levying purchase tax on hainboos agreed to be served and standing trees agreed to
be sevred-Whether ultra vires the Act-Whether create new class of goods no(
known to /aw-U'hether atnount lo tax on itnmovable property-And not on
goods-notifications issued in supersession of all previous notifications on the
subject-Whether wipe out all tax liability accruing under previous .notifications.
"Timber" 'and "logs"-Whether mean the same thing.
Ba1nboo contract-Nature of-Whether an ea},·enienl.
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lnterpretation-Natu1·e and 1n1.11i•1g ;Jj .1 docunient-·Whether can be
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detcrn1ined by th.e end·result-Court-1/ co11J,J go inrO policy 1natters.
Constitution of India-Article 141-Co11/lirti11g views of the Supretnc Court
nn same point-View of larger Bench to be ft/lowed in pr<'ference to view of
smaller Bench.
Scctio:1 3B of the Orissa Sales Tax Act 1947 empowers the State Govern·
ment to declare from time to time any goods or class of goods to be liable to tax
on turnov~r of purchases. The proviso provides that no ta.'!; shall be payable
on the sales ?f such g)Jds or class of g.Jods declared under this section. Section
5(1) prior to its amendrnent by the Orissa Sales Tax (Amendtnent) Ordinance,
1977 provides that the tax payable by a d~aler under the Orissa Act should be
levied on his taxable turnover at such rate not ex:ceeding thirteen percent and
subj~ct to such conditions as the State Government might from time to time by
notific:ttion specify.
On May 23, 1977 the State Government issued two notifications. Notifica·
tion No. SRO 372/77 was made under section 3B amending the earlier notifica·
tion dated April 23, 1976. This notification made standing trees and bamboos
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agreed to be severed Jiabli; to tax on the turnover of purchase with effect from
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ORISSA v. TITAGHUR .PAPEI!. MILLS
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June 1, 1977. Notification SRO No. 373/77 issued under the first proviso ... to.
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sec,ion 5(1) of the Orissa Act amende~ with effect fron1.June 1, 1977 the second.
of the two notificatioo.s of April 23, 1976 and direc.ted that. th~ tax payable by,
a dealer under the Orissa Act on account of purchase of bamboos agreed to be,
severed and standing trees agreed to be severed wOuid be at the rate'o~ 10~,- .·
On December 29, 1977 the Orissa Sales Tax (Am~ndm~nt) ()rdlriance,
1977 was promulgated amending the Orissa Act ·with effeCt from Ja,rtuarY, 1978.:
With effect from the sar'ne date two notifications SRO .~o- 900{77 ,and SRb Nq:.~
901/77 were issued; the first notification which was issued under the provision·s
of section 3B ana in supersession of all previous· notificUtions on 'the subject: -
declared that the goods mentioned in ColumO. (2) ·of th~ sch_edule to the·n.~tifi~
cation were liable to be taxCd on the turnover' of Pu'rchase with ~ffec~ frO~ ~
January 1, 1978. Entries 2 and 17 in the schedule of this notification spc9ified
"bamb:-os agreed to be severed" and "standing trees agreed tO be severed" ,
respectively. Notification No. 901/77 issued under section 5 (1) wls in super-
ses~ion of all previous notifications in that regard. The State GOvcrnm~nt, by
this notification, directed that with effect fronl January 1, 19?8 the tax pay'ab!e
by a dealer under the Orissa Act on account of purchase of goods specified in
column (2) of the schedule to the notification would be at the rate sPeciti'ed ·
against it in colu1nn (3) thereof. The rate of purchase tax for bamboos agreed·;
to be severed and standing trees agreed to "be severed was prescribed at 10%.
The Ordinance ~as repealed and replaced by Orissa Sales Tax ·(AmendmeOt)
Act of 1978.
A large: number of writ petitions were filed before the High Cou_rt impugn~
ing the notifica1ions dated May 23, 1977 and December 29, · 1977. One. grotip
of petitioners consisled of those who had entered into agreements with the
State for the felling, cutting, obtaining and re1noving bamboos from forest areas
for the manufacture of paper· (blmboo contracts), and thci other' group -consisted
of those who had entered into agreements for the purchase of 'standiOg trees
(Timber Co'ntracts).
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The bamboo conlracts were a grant of exclusive right and licence to fell, -
cut and remove bamboos Excerpt shown. Read the full judgment & AI analysis in Lexace.