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Mohanlal Vishram Vs. Commissioner of Sales Tax - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtMadhya Pradesh High Court
Decided On
Case NumberMiscellaneous Civil Case No. 88 of 1964
Judge
Reported in[1969]24STC101(MP)
AppellantMohanlal Vishram
RespondentCommissioner of Sales Tax
Appellant AdvocateG.P. Mahajan, Adv.
Respondent AdvocateK.K. Dubey, Government Adv.
Cases ReferredThe State of Madhya Pradesh v. Wasudeo
Excerpt:
- .....facts and circumstances of the case, the imposition of purchase tax under section 8(1) of the m.p. general sales tax act, 1958, on the lease money amounting to rs. 41,750 paid by the applicant after 1st april, 1959, for the purchase of forest coupes was justified ?2. the facts material for this reference as given in the statement of the case are these. the assessee is a forest contractor and deals in timber, ballis, etc. his turnover of sales for the period 12th november, 1958, to 31st october, 1959, was assessed to tax. for the period 12th november, 1958, to 31st march, 1959, assessed under section 11(3) of the c.p. and berar sales tax act, 1947, the turnover was enhanced from rs. 85,633.03 to rs. 87,000 and for the rest of the period assessed under section 18(5) of the m.p. general.....
Judgment:

K.L. Pandey, J.

1. This reference under Section 44(1) of the Madhya Pradesh General Sales Tax Act, 1958, has been made at the instance of the assessee. The questions of law which have been referred to us for our opinion are :

(i) Whether, in the facts and circumstances of the case, the rejection of the account books of the applicant was justified and the enhancement of the turnover disclosed by his account books to Rs. 87,000 from Rs. 85,633.03 for the period 12th November, 1958, to 31st March, 1959, and to Rs. 92,000 from Rs. 90,017.05 for the period 1st April, 1959, to 31st October, 1959, was warranted ?

(ii) Whether, in the facts and circumstances of the case, the imposition of purchase tax under Section 8(1) of the M.P. General Sales Tax Act, 1958, on the lease money amounting to Rs. 41,750 paid by the applicant after 1st April, 1959, for the purchase of forest coupes was justified ?

2. The facts material for this reference as given in the statement of the case are these. The assessee is a forest contractor and deals in timber, ballis, etc. His turnover of sales for the period 12th November, 1958, to 31st October, 1959, was assessed to tax. For the period 12th November, 1958, to 31st March, 1959, assessed under Section 11(3) of the C.P. and Berar Sales Tax Act, 1947, the turnover was enhanced from Rs. 85,633.03 to Rs. 87,000 and for the rest of the period assessed under Section 18(5) of the M.P. General Sales Tax Act, 1958, the turnover was enhanced from Rs. 90,017.05 to Rs. 92,000. For these periods, the regularly maintained account books of the assessee were not accepted because the sales of timber in cubic feet appeared to be somewhat more than the quantity extracted and the account of ballis was not shown in cubic feet. Further, the assessing officer imposed purchase tax on the sale price (called lease money) amounting to Rs. 41,750 under Section 8(1) of the M.P. General Sales Tax Act, 1958, on the ground that standing trees, which had been purchased, were felled and cut and then sawn by the assessee for getting timber and ballis. The view taken by the assessing officer was affirmed in two successive appeals filed by the assessee and then, at his instance, this reference was made.

3. We have heard the counsel and formed the opinion that, so far as the first question is concerned, the facts are similar to those of other cases between the same parties, namely, Mohanlal Vishram v. Commissioner of Sales Tax [1964] 15 S.T.C. 331 and Mohanlal Vishram v. The Commissioner of Sales Tax, Madhya Pradesh Misc. Civil Case No. 87 of 1964, decided on 23rd January, 1968 There too the questions related to rejection of regularly maintained account books and enhancement of the turnover. In this case, the enhancement is slight because the sales in cubic feet were somewhat in excess of the quantity extracted. We would answer, as we did in the cases referred to by us, the first question in the affirmative.

4. In regard to the second question, we are of opinion that by felling standing timber trees, cutting them and converting some of them into ballis, the assessee did not alter their character as timber or used them for the manufacture of 'other goods' within the meaning of Section 8(1) of the M.P. General Sales Tax Act. In our opinion, the goods sold by the assessee retained their character as timber and did not become 'other goods'. It is true that in The State of Madhya Pradesh v. Wasudeo [1955] 6 S.T.C. 30 Bhutt, J. (as he then was), observed that, when standing timber trees were converted into logs or rafters, there was a distinct advance from their original form, but he did not say that they constituted 'other goods'. With all due respect, we think that the so-called advance from the original form did not alter their basic character as timber and, therefore, purchase tax could not be levied under Section 8(1) of the Act.

5. We answer the two questions referred to us in the manner indicated above and direct that, in the circumstances of the case, the parties shall bear their own costs of this reference.


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