THE STATE OF ORISSA AND ANOTHER versus M/S. CHAKOBHAI GHELABHAI AND COMPANY

Citation: [1961] 1 S.C.R. 719 · Decided: 20-09-1960 · Supreme Court of India · Bench: S.K. DAS · Disposal: Appeal(s) allowed

Cited by 4 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

• 
;;; 
1 S.C.R. SUPREME COURT REPORTS 
719 
' 
THE STATE OF ORISSA AND ANOTHER 
v. 
M/s. CHAKOBHAI GHELABHAI AND 
COMPANY 
(S. K. DAS, M. HIDAYATULLAH, K. c. DAS GUl'TA, 
J.C. SHAH a.nd N. RAJAGOPALA AYYANGAR, JJ.) 
Sales Tax-Sales tax autlwrities-Whether courts~Levy of 
fees on memorandum of appeal and application for revision-Whe-
ther taxes-Legislative competence-Place where sale effected-Ques-
tion of law o~ fact-Issue of one notice for several quarters-Legality 
-Orissa Sales Tax Act, z947 (Orissa I4 of I947), ss. 2(g), z2(5), 
29(2)(s)-Orissa Sales Tax Rules, z947, rr. 20, 59-Government of 
India Act, z935 (25 & 26 Geo. 5, Ch. 42). Seventh Schedule, List II, 
Items I, 48, 54. 
The respondent firm, which had its headquarters in Madhya 
Pradesh and was, during the years 1948 to 1951, engaged in col-
lecting bidi leaves from certain forest areas in Orissa and des-
patching them to various destinations outside the State of 
Orissa, did not get itself registered as a dealer under the Orissa 
Sales Tax Act, 1947, and did not submit a return in spite of the 
notice issued to it. It was asked to show cause why a penalty 
should not be imposed under s. 12(5) of the Act. The assessing 
authority then proceeded to assess the tax to the best of its 
judgment and determined the taxable turnover for each of the 
twelve quarters, the first quarter ending on June 30, 1948, and 
the last quarter ending on March 31, 195r. A penalty of Rs. 500 
for each quarter was also imposed. The respondent's appeal to 
the Assistant Collector of Sales Tax against the JJrders of assess-
ment and penalty was dismissed, and the revision petition was 
rejected by the Collector of Commercial Taxes as having been 
filed out of time. One of the pleas taken before the appellate 
authority was that the respondent was not a dealer in Orissa 
inasmuch as the sales of bidi leave·s were not effected in Orissa, 
but at the hearing of the appeal it wa..admitted by the respond-
ent's pleader that the sales were completed in Orissa. The High 
Court, on a writ petition filed by the respondent, set aside the 
the orders of assessment and penalty on the grounds, inter alia, 
(1) that the assessment orders were bad because of the repeal of 
the second proviso to s. 2(g) of the Act defining " sale ", by the 
Adaptation of Laws Order, 1950, (2) that the levy of fees on the 
memorandum of appeal and the application in revision on a 
graded scale under r. 59 read with s. 29(2)(s) of the Act amount-
ed to the imposition of a tax which was beyond the competence 
of the State, and (3) that the notice issued nnder s. 12(5) of the 
Act was not in accordance with law, inasmuch as separate noti-
ces were not issued for each quarter. 
92 
September 20 . 
Stall of Orissa 
v. 
CAahobhai 
Gh•l•bhai e.. Co. 
S. K. Das J. 
720 
SUPREME COURT REPORTS 
(1961] 
Held, (1) that the question as to where a sale was complet-
ed depended on facts and was not a pure question of law and, 
therefore, the admission made by the respondent's pleader was 
binding on the respondent; and that as the admission brought 
the sales within s. 2(g) of the Act, it was unnecessary to consider 
the second proviso to s. 2(g) and the sales were liable to tax ; 
(2) that the sales-tax authorities including the Assistant 
Collector of Sales Tax and the Collector of Commercial Taxes, 
though they exercised quasi-judicial functions under the Act, 
were not courts in the strict sense of the term "Court " ; 
(3) that fees levied under r. 59 read with s.-29(2)(s) of 
the Act were not taxes but were imposed for services rendered 
by a governmental agency. Section 29(2)(s) was not' invalid on 
the ground of legislative incompetence and r. 59 did not go 
beyond what was permitted under that section; 
The Con1missianer, Hindu Religious Endowments, Madras v, 
Sri Lakshmindra Thirtha Sttamiar of Sri Shirur Mutt, [1954) 
S.C.R. 1005, relied on. 
(4) 
that the issue of one notice under s. 12(5) of the Act 
for several quarters was not contrary to law as the section 
makes refe.rence to a period which might consist of more than 
one quarter. 
CIVIL 
APPELLATE JURISDICTION : Civil Appea.1 
No. 710of1957. 
Appea.l from the judgment a.nd order da.ted Septem-
ber 5, 1955, of the Orise& High Court in 0. J.C. No. 92 
of 1954. 
N. 0. Chatterjee, H.J. Umrigar a.nd T. M. Sen, for 
the a. ppella.n ts. 
J. M. Thakar a.nd J. B. Dadachanji for the respond-
ents. 
R. Gopalakriahnan a.nd J. B. Dadachanji, for the 
Intervener. 
1960. Sept

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