K.M. Lahiri, Ag. C.J.
1. We propose to dispose of these civil rules by a common judgment as common questions of facts and laws are involved in these civil rules.
2. The moot question is whether 'meat on hoof' is taxable under the Assam Sales Tax Act, 1947 To answer the question it is necessary to gather the meaning of the expression 'meat on hoof'. The petitioners are contractors who supplied among other things 'meat on hoof' and 'meat' to para-military forces like the Assam Rifles, etc. Under Section 7 read with entry 11 of Schedule III to 'the Act' no tax is payable on the sale of meat except when sold in sealed containers. However, in the instant cases, the question of sale in sealed containers does not arise. The taxing authorities held that the assessee had supplied 'meat on hoof' relying on the tender notices. Admittedly the sales tax authorities did not consider the terms of the contract between the contractors and the para-military authorities.
3. It has been urged before us that what was supplied by the contractors and accepted by the buyers was only the meat-content of the animal though described as 'meat on hoof' in the tender notices. It has been urged that the price paid by the buyers was on the basis of the meat-content of the animals. Indeed the tender notices do indicate that the buyers desired to purchase 'meat on hoof'. But the question is what was sold by the contractors to the buyers, whether live animals or meat, i.e., flesh. The tender notices do not clearly show whether the price paid by the buyers was on the basis of the meat-content of the animal or the sales were for live animals. It appears to us that the respondents completely left out of consideration the terms of the agreements between the buyers and the suppliers. There is no wrangle at the Bar that it would be clear on perusal of the terms of the contract as to the nature of supply accepted by the buyer, and, whether the price was paid on the basis of live animals or on the basis of the meat-content of the animal, i.e., on the basis of percentage of the weight of the animal taken as the amount of 'dressed meat'. Some tender notice have been annexed by the parties wherefrom we find indication that certain percentage of the actual weight of the animal was stipulated to be the meat received or receivable from such animals and certain ratio were taken to be the weight of the meat for the purpose of supply.
4. It is the common case of the parties that no tax is leviable on sale of 'meat'. There is also no dispute that the decisions taken by the authorities below that the live animals were sold, were entirely based on the expressions 'meat on hoof' and the terms of the contracts were not taken into consideration to decide what supplies were made by the contractors-live animals or meat. It is also not disputed that the authorities below did not try to ascertain whether price paid by the buyers was on the basis of the meat-content of the animals or not. It appears from the terms of the tender forms that the price paid by the (sic) percentage of the weight of the animal was taken in calculating the price of flesh/meat or dressed meat.
5. We are of the firm opinion that the question whether meat or live animals were sold can be adjudged only on the correct interpretation of the contracts between the contractors and the purchasing departments. If the price paid by the buyers was on the basis of meat-content of the animal then it should be treated as supply of meat, even if described as 'meat on hoof', that is, live animals. In such sale transaction what was sold would be nothing but 'flesh or meat'. If the terms of the contract was to pay the price only on the basis of the meat-content of the animal in that event the sale shall be sale of flesh or meat.
6. In similar situation the Supreme Court in Daffadar Bhagat Singh and Sons v. Joint Excise and Taxation Commissioner, Punjab, Patiala AIR 1976 SC 2544, observed and held as follows:.Counsel for the respondents submitted that 'meat on hoof in army vocabulary meant the live animal. Whether what was sold by the appellants to the army authorities as meat on hoof was really meat, or it was live animals that were sold, would depend on a correct reading of the contract between the parties.... On behalf of appellants extracts from the contract were handed up to us, but the counsel for the respondents seemed to think that there were other terms in the contract, regarding skins for instance, which have a bearing on what was sold. We are, therefore, not in a position to decide for ourselves what exactly was the contract between the parties.... As we feel that the question can be answered only on a proper appreciation of the terms of the agreement between the appellants and the army authorities, the case must go back to the High Court for disposal of the matter according to law on a consideration of the relevant contract....
7. It follows, therefore, that when written contract exists the decision as to whether live animal or meat was sold should be determined by the taxing authorities on the basis of the terms of the contract. No other extraneous consideration or opinion should be taken into consideration to determine the issue. In the instant cases the authorities below did not look at the contracts, no attempt was made by the authorities to examine the terms of the contract between the contractors and the buyers to decide the crucial question. We hold that the question could be resolved only on a proper appreciation of the terms of agreements between the contractors and the buyers. What, therefore, is axiomatic according to us, is imperative necessity to consider as crucial, the scope of the sale transaction to determine what actual goods or article was actually sold despite any fanciful name ascribed to it by one of the parties to the transaction. The contract of sale, when it exists must, therefore, be the decisive factor to determine the exact nature of the goods sold, to answer the question whether such goods are taxable or exempted under 'the Act'. We are constrained to hold that the impugned orders were 'purported decisions' and not 'real decisions'. The decisions are bisec on extraneous grounds or no. material. The decisions have left out of consideration the real determining factor and as such they are not 'real decisions'.
8. We, therefore, quash the impugned orders and remit the cases to the Superintendent of Taxes, Silchar, for their disposal according to law. If the assessees have not filed the terms of the contracts they shall have to file them within two months from today. However, if the agreement/contracts are before the Superintendent of Taxes, he shall on perusal of the contracts and upon hearing the parties dispose of the matters at an early date preferably within one month from the date of hearing of the cases. We direct the petitioners through their lawyers to appear before the Superintendent of Taxes, Silchar, on 27th May, 1985, and thereafter the Superintendent of Taxes, Silchar, shall hear and dispose of the cases preferably within a month therefrom or from the date of production of the contracts as the case may be.
9. Before parting, we would like to state once again that while considering the moot question, the Superintendent of Taxes shall consider whether the price paid by the buyers was on the basis of the meat-content of the animal or the price was paid for purchasing live animals and, thereafter, determine whether the goods supplied fall in item No. 11 of Schedule III to 'the Act'.
10. In the result the petitions are accepted to the extent indicated above. However, we make no order as to costs. Send down the records forthwith.