R.N. Misra, J.
1. This court by order dated 2nd February, 1971, called upon the Tribunal at the instance of the State of Orissa represented by the Commissioner of Sales Tax to state a case referring the following questions of law for determination of this court :
(1) Did the opposite party effect any sale of timber at all?
(2) If he did effect such a sale outside the jurisdiction of the Sales Tax Officer, Dhenkanal Circle, is the opposite party entitled to take the objection of jurisdiction without advancing the same at the earliest opportunity before the Sales Tax Officer ?
From the statement of facts by the Tribunal and the orders in appeal, these facts may be noted. The assessee, a resident of Palalahara in the District of Dhenkanal is a forest contractor. Notice was issued to him under Section 12(5) of the Orissa Sales Tax Act in respect of quarters ending 31st March, 1959, 30th June, 1959, 31st December, 1960, 31st March, 1961, 30th June, 1961, 31st December, 1962, 31st March, 1963, 30th June, 1963, and 30th September, 1963. Assessments for quarters ending 31st March, 1959, and 30th June, 1959, were completed on 28th March, 1962, ex parte. On 5th July, 1962, the assessee had appeared before the assessing officer and had given a statement about his business. Assessment for the quarter ending 31st March, I960, which is not in dispute was made on 30th March, 1963. On that day, the assessee also appeared before the assessing officer and stated certain things which were noted in the order sheet of the assessment proceeding. Assessment for the remaining seven quarters in dispute was completed on 29th February, 1964, though notice under Section 12(5) of the Act was given on 16th January, 1962, for the first five quarters in dispute and on 5th December, 1963, for the second set of four quarters now in dispute. (These dates have been collected from the learned standing counsel during hearing of the reference petition and assessee's counsel does not object to these dates). The assessing officer completed the assessments by treating the gross turnover of the assessee at thrice the lease value of forest coupes taken by the assessee. There was no clear determination by the assessing officer that any sales had actually been effected. The first appeals before the Assistant Commissioner of Sales Tax were dismissed though the estimated taxable turnover was reduced. The second appeals were allowed by the Additional Sales Tax Tribunal, and it found :
The learned counsel for the appellant very strongly urged that the dealer had no place of business at Angul and effected no sale within the jurisdiction of Dhenkanal Circle and, therefore, the assessing officer had no right to tax the dealer. On the other hand, it was urged that since the dealer had his residence at Palalahara within Dhenkanal Circle, he must have carried on business or kept his books of account within the Dhenkanal Circle and, therefore, the Sales Tax Officer was justified in taxing him. The learned counsel for the appellant drew my attention to the assessment order for the quarter ending March, 1960, wherein the assessing officer has held that the dealer works as a forest contractor under Deogarh Forest .Divisional Office which is outside the jurisdiction of the Dhenkanal Circle. . The word 'dealer' has been denned in Section 2(c) of the Orissa Sales Tax Act, 1947, which shows any person who carries on the business of purchasing or selling or supplying goods in Orissa, whether for commission, remuneration or otherwise and includes a department of Government which carries on such business, and any firm or Hindu joint family, and any society, club or association which purchases goods from or sells or supplies goods to the members and also includes a casual dealer as hereinbefore defined. It could not be shown that the appellant carried on business of selling or supplying goods or kept accounts within the Dhenkanal Circle. Therefore, the assessments are without jurisdiction and are annulled.
The disposal of the appeals by the Tribunal seems to have been indeed perfunctory. The Additional Member did not clearly indicate as to what were the contentions raised in appeal before him. He dealt with the question of jurisdiction in a very perfunctory manner. Such objection does not appear to have been raised either at the assessment stage or even in first appeal. Their Lordships of the Supreme Court have indicated that mere inclusion of some grounds in the memorandum of appeal does not justify a conclusion that the contention was canvassed. Therefore, in the absence of any reference to the question of jurisdiction in the order of the first appellate authority, and assertion that such contention had indeed been raised, challenge against jurisdiction cannot be inferred to have been raised in the first appeals.
There is force in the contention of the learned standing counsel that the Additional Member did not keep in view the fact that the Deogarh Forest Division also covered large areas of Dhenkanal and merely because the assessee carried on business under Deogarh Forest Division, he should not have been found to be outside the jurisdiction of the assessing officer of the Dhenkanal Circle.
2. The first question which has been raised is as to whether the assessee effected any sale of timber at all. Strictly speaking, the Tribunal's order does not indeed deal with this question. Learned counsel for both sides, however, stated that while referring to the definition of 'dealer', the Additional Tribunal had the question of effecting sale in view. On that basis, in the reference applications before this court that question has been raised. We, therefore, proceed on the footing that such a question was canvassed before the Tribunal and though not in clear terms, the Additional Tribunal has indeed dealt with it. As such, such a question can be taken to arise out of the second appellate order under the second proposition indicated by their Lordships of the Supreme Court in the case of Commissioner of Income-tax, Bombay v. Scindia Steam Navigation Co. Ltd.  42 I.T.R. 589 (S.C.)
There seems to be no evidence on record at all to show that the assessee effected any sale during the relevant quarters. In the order of assessment for the quarter ending 31st March, 1959, the assessing officer had stated:.the dealer neither appeared nor caused production of his books of account for examination. Hence, assessment for the quarter is completed on the basis of materials available on record. The dealer had taken lease at the value of Rs. 9,075 during the year 1958-59. His total sales from this lease area are estimated to have been at least three times the lease amount. One-third of the total sales, i.e., Rs. 9,075 is determined to be the dealer's gross turnover for this quarter...
Similar is the assessment for the quarter ending 31st December, 1960. These are the quarters in which speaking orders were passed. Thus, the assessment has been on the footing that the assessee is a lessee of forest coupes and not. on a finding that sales have actually been effected. In the paper book prepared for the reference cases by the learned standing counsel, assessment orders for no other quarters were included. But as the records were before us, we referred to the assessment orders of other quarters. Even in the other assessment orders, there is no finding of any sale having been effected actually and the same basis has been adopted, namely, an estimate of three times of the lease value. The assessing officer has nowhere chosen to refer to the statement of the assessee given on 30th March, 1960, admitting to have effected some sales. Thus, no reliance can be placed upon such statement of the assessee in support of these assessments.
3. Liability to taxation under the Orissa Sales Tax Act can arise only when there be any sale. For creating liability under the Sales Tax Act by making assessment, the initial burden would be on the revenue to show that there has been a sale. No presumption is available to be raised that a forest contractor has sold forest materials. A lease of a coupe may be taken, but the lessee may not be able to operate at all. The lease may be cancelled. The lessee for some reason or other may not be able to exploit the forest. All the extractions may be washed away by flood, as in the instant case a part has been found to have been washed away by floods in the river Brahmani. Therefore, merely from the fact that the assessee took some forest leases, by inference, it cannot be assumed that he has sold and the extent of sale on the basis of the lease money cannot be estimated. The learned standing counsel accepted the position that the assessee has not been taxed in respect of every quarter as during certain quarters he was found to have effected no sales. If that could be the position in regard to some quarters, that could also be the position for other quarters, unless on the basis of evidence it can be found that during those quarters, the assessee did effect sales. There does not seem to be any material on record to hold that the assessee has effected sales. Our answer to the first question, therefore, shall be that on the basis of the materials on record we hold that no material is available to hold that the assessee has effected any sale of timber at all.
4. In view of the aforesaid finding, that there is no material to hold that the assessee effected any sale, the question as to whether such sale was outside the jurisdiction of the Sales Tax Officer, Dhenkanal Circle, does not fall to be determined. Such a question would require answer provided there would be sales. We, therefore, decline to answer the second question as it is academic and does not arise for determination in view of the finding that the revenue has failed to establish that any sales were effected by the dealer.
5. We direct both parties to bear their own costs.
B.K. Ray, J.