S.S. Sandhawalia, C.J.
1. Whether the mere despatch of manufactured goods by a dealer to his branches outside the State of Haryana (whilst retaining both title and possession thereof) would come within the ambit of the phrase 'disposes of the manufactured goods in any manner otherwise than by way of sale' as employed in Section 9(1)(a)(ii) of the Haryana General Sales Tax Act, 1973, is the spinal question in this set of six civil writ petitions. In more specific terms, the validity of Notification No. S.O. 119/H.A. 20/73/Ss. 9 and 15/74 dated 19th July, 1974, issued under Section 9 (prior to its amendment by Act No. 11 of 1979) and Sub-section (1) of Section 15 of the Haryana General Sales Tax Act, 1973, levying purchase tax on the despatch of such goods is strenuously challenged on the ground of the same being beyond the scope of the Act aforesaid.
2. Learned counsel for the parties agreed that the issues of law and fact being identical this judgment would govern all the six writ petitions. The factual matrix, which is broadly common may be taken from C.W.P. No. 1138 of 1982 (Messrs. Goodyear India Limited, Ballabgarh v. State of Haryana). The petitioner-company is a well-known concern engaged in the manufacture of various types of tyres and tubes at Ballabhgarh, within the State of Haryana and is registered as a dealer both under the Haryana General Sales Tax Act, 1973 (hereinafter called 'the Act'), and the Central Sales Tax Act, 1956. On the basis of the return submitted by the petitioner-company, respondent No. 2, the Assessing Authority has passed the assessment order, annexure P-l, dated 20th January, 1982. Therein it has been found that the company has transferred goods worth Rs. 43,32,61,857.59 as per books to its own branches and sales depots outside the State of Haryana, which were found to be in order. Rejecting the petitioner's claim that no tax was payable thereon the Assessing Authority took the view that under Section 9 of the State Act purchase tax is leviable on proportionate value of the goods utilised in the manufacture of goods and sent to branches as stock transfer for sale. This has been primarily so held on the basis of the impugned notification, annexure P-2. Consequently, an overall liability to the tune of Rs. 6,16,482.92 has been created against the petitioner-company. The firm stand of the writ petitioner is that under Section 9 of the Act, the transfer of stocks by the company to its own branches and sales depots outside the State of Haryana, does not amount to a disposal of the same and is consequently not exigible to tax under Section 9 of the Act. It is highlighted that both the title and the possession of goods have admittedly been retained by the petitioner-company and their mere despatch outside the State does not amount to 'disposing of' the manufactured goods. On these premises the impugned notification, annexure P-2, is assailed, as wholly beyond the scope of the Act and therefore ultra vires of the same.
3. Inevitably, the controversy herein revolves closely around the relevant provisions of the unamended Section 9 of the Act and the terms of the impugned notification, annexure P-2, which may be quoted for facility of reference at the very outset:
9. Where a dealer liable to pay tax under this Act purchases goods other than those specified in Schedule B from any source in the State and-
(a) uses them in the State in the manufacture of,- (i) goods specified in Schedule B or,-
(ii) any other goods and disposes of the manufactured goods in any manner otherwise than by way of sale whether within the State or in the course of inter-State trade or commerce or within the meaning of Sub-section (1) of Section 5 of the Central Sales Tax Act, 1956, in the course of export out of the territory of India,
(b) exports them, in the circumstances in which no tax is payable under any other provision of this Act, there shall be levied, subject to the provisions of Section 17, a tax on the purchase of such goods at such rate as may be notified under Section 15.
Excise and Taxation Department
Notification No. S. 0. 119/H.A. 20/73/Ss. 9 and 15/74 dated the 19th July, 1914.
In exercise of the powers conferred by Section 9 and Sub-section (1) of Section 15 of the Haryana General Sales Tax Act, 1973, the Governor of Haryana hereby directs that the rate of tax payable by all dealers in respect of the purchases of goods other than goods specified in Schedules C and D or goods liable to tax at the first stage notified as such under Section 18 of the said Act, if used by them for purposes other than those for which such goods were sold to them, shall be the rate of tax leviable on the sale of such goods :Provided that where any such dealer, instead of using such goods for the purpose for which they were sold to him, despatches such goods or goods manufactured therefrom at any time for consumption or sale outside the State of Haryana to his branch or commission agent or any other person on his behalf in any other State and such branch, commission agent or other person is a registered dealer in that State and produces a certificate from the assessing authority of that State or produces his own affidavit and the affidavit of the consignee of such goods duly attested by a Magistrate or Oath Commissioner or Notary Public in the form appended to this notification to the effect that the goods in question have been so despatched and received and entered in the account books of the consignee, the rate of tax on such goods shall be three paise in a rupee on the purchase value of the goods so despatched.
4. At the very outset, it must be pointedly noticed that the learned Advocate-General initially made a vain attempt to bring the impugned notification and the assessment made thereunder within the ambit of 'export' under Clause (b) of Section 9(1) of the Act, aforesaid. However, finding this to be as totally untenable both in law and on the existing pleadings, he fell back squarely, on a firm stand that a mere despatching of goods out of the State by the dealer even to himself, was synonymous with the disposing of such goods and came within the net of purchase tax under Section 9(1)(a)(ii) of the Act. The matter is, therefore, narrowly confined betwixt these respective positions, taken on behalf of the petitioner and the respondent-State.
5. Examining the matter in the context aforesaid, what deserves highlighting at the very threshold is the fact that Section 9(1)(a)(ii) of the Act uses the composite phrase 'disposes of'. It was argued on behalf of the petitioner-company with a certain modicum of plausibility that the phrase 'disposes of' is even more categoric than the single word of either 'disposal' or 'disposed Reference was made both to the ordinary dictionary meaning of these words as also their legal connotation as the terms of art when used in taxing statutes. The firm position on behalf of the petitioner-company is that 'disposes of' connotes a minimum of forsaking of the control over the goods if not of title as well. Therefore, it was submitted that where both title and possession remained with the dealer, it cannot possibly come within the ambit of the phrase 'disposes of' the goods by him.
6. It seems to be obvious that the core of the matter herein is the width and ambit of the phrase 'disposes of the manufactured goods in any manner otherwise than by way of sale' as employed in Section 9 of the Act. Now it is plain that the words 'disposes of' is not basically a term of legal art and therefore, it is both apt and necessary to first turn to its ordinary meaning in order to determine whether a mere despatch of goods by a dealer to himself would connote 'disposes of' such goods by him. Undoubtedly, a word may be capable of a variety of connotations, but the basic meaning given to the phrase 'disposes of' in this context, has been stated as under in Webster's Third New International Dictionary :
2. a. to transfer into new hands or to the control of someone else as by selling or bargaining away : Relinquish, bestow (dispose of some property to a man all too anxious to buy) (dispose of public offices to all his political friends); to get rid of ; throw away : Discard (dispose of a lot of old clothes by burning them)... to treat or handle (something) with the result of finishing or finishing with... Destroy....
In the Shorter Oxford English Dictionary, the relevant meaning of the words 'dispose' and 'disposal' are as follows, respectively :
3. To bestow, make over; to deal out, distribute.
* * *
3. The action of giving or making over; bestowal, assignment, power or right to dispose of, ...
It would seem to follow from the aforesaid dictionary meanings of the, phrase 'disposes of' that it may well involve the forsaking of both title and control over the goods. The most apt example may well be the disposing of goods by sale which may involve both the passing of title as of possession by delivery in favour of the purchaser. Even in the absence of a consideration, a gift with delivery of goods to another may amount to disposing of the same. Even with the utmost degree of liberality in favour of the respondent-State, disposal of goods would at least involve an abandonment of control thereof. In plain language, it seems difficult, if not impossible, to subscribe to the position that even where the title and the possession continue to vest in the owner, he would be deemed to have disposed of such goods.
7. If the position be as above in the ordinary parlance, it may be the more so when the phrase 'disposes of' is used in taxing statutes as a term of art. In 27 Corpus Juris Secundum, page 345, the word 'disposal' amongst others has been attributed the following legal meanings :.It may be employed as meaning alienation ; gain ; parting with ; passing from one person into the control of another ; the alienation or parting with property, or the transference of anything into new hands; the passing out of control from one to another, either temporarily or permanently, as distinguished from a mere change of use by the owner; and not merely the power to sell but also the right to consume or use. ...
Again the phrase 'disposes of' is specifically attributed the following meaning:.hence, more specifically, to alienate, 'bargain away, barter, bestow, convey, exchange, give, give away or transfer by authority, part with, pass over into the control of someone else, put into another's power and control, relinquish, sell a thing, settle or transfer'. Also in other senses, to collect, finish with, get rid or put away by any means or remove. ...
8. It inevitably seems to follow from the above that both on the ordinary meaning as also its legal connotation, the phrase 'disposes of' or 'disposal' cannot be possibly equated with the mere despatch of goods by a dealer to himself. The extreme stand on behalf of the respondent-State that 'disposes of' is synonymous with mere despatch of goods to oneself, appears to be rather untenable. Even if the somewhat larger connotation envisaged by the statute, namely, 'disposes of the manufactured goods in any manner otherwise than by way of sale' is taken into consideration, it cannot possibly be elongated to a mere despatch of goods to self. It may well include other modes of disposal than by way of sale, namely, by gift, by consumption of the goods, by mortgaging with possession, and for argument's sake (without holding so), even a mere delivery of possession to another. However, where the owner retains both the title in the goods as also the control and possession thereof, it seems difficult if not impossible to hold that he has nevertheless disposed of those goods. Indeed, equating disposal with a mere despatch of goods to oneself under Section 9(1 )(a) of the Act, seerns to lead not only to anomalous but also absurd results. On this construction, even if a dealer despatches goods to another branch or another godown of his, within the same State, even then it would come within the ambit of Section 9(1)(a) of the Act. Surely, one cannot attribute to the legislature the intention of taxing every movement of goods from one place to another, whilst they remained under the same ownership and possession, within the State itself. With respect, it appears to me that adopting the construction canvassed on behalf of the respondent-State would lead to a patent anomaly, which on sound canons of construction has to be necessarily avoided.
9. Now apart from principle, the authorities including those relied upon by the learned Advocate-General run counter to the stand taken on behalf of the respondent-State. In the larger context, here, what calls for prominent attention is the fact that a number of sales tax statutes in the other States provide separately and distinctly for a despatch of goods outside the State when it is sought to bring them within the ambit of the tax net. 'Disposing of' goods and merely despatching them are separately and distinctly provided for in these statutes. Consequently, the reliance of the learned Advocate-General on precedents where the language of such taxing statutes itself envisages despatching of goods separately would, far from aiding his stand, only repel the same. Reference may first be 'made to K. Cheyyabba v. State of Karnataka  45 STC 1, wherein Section 6 of the Karnataka Sales Tax Act, 1957, fell for construction before the Division Bench. Under the aforesaid Section, Clause (i) expressly provided for cases where the goods were either consumed in the manufacture of other goods or otherwise disposed of in any manner other than by way of sale in the State. However, Clause (ii) of the Section 6, in terms provided expressly for despatching of goods to a place outside the State. Construing the words 'disposes of' in Section 6(i) above, the Division Bench came to the conclusion that in the context in which it was used in Section 6, it means transfer of title in the goods to any other person in the State otherwise than by way of sale. Reliance for this view was placed on the earlier judgment in State v. Raghurama Shetty  35 STC 360.
10. In fairness to the learned Advocate-General one must notice his tenuous reliance on State of Tamil Nadu v. M. K. Kandaswami  36 STC 191 (SC). Therein, their Lordships of the Supreme Court were construing the provisions of Section 7A of the Madras General Sales Tax Act, 1959. Clause (b) thereof provided for the case of a disposal of goods in any manner otherwise than by way of sale in the State whilst Clause (c) in terms, provided expressly for despatching of such goods to a place outside the State, etc. It was on the specific terms of Clauses (b) and (c) that their Lordships held that the statute covered both the disposing of goods as also their despatch outside the State. This authority is no warrant for the proposition that a mere despatch of goods is within the ambit of disposing them of. Indeed, analytically construed, the judgment would indicate that both the legislature as also the court in construing the provisions had held disposal of goods as separate and distinct from a mere despatch thereof. The same position inheres in Ganesh Prasad Dixit v. Commissioner of Sales Tax, Madhya Pradesh  24 STC 343 (SC) on which also reliance was placed on behalf of the respondent-State. Therein, their Lordships of the Supreme Court were again construing Section 7 of the Madhya Pradesh General Sales Tax Act, 1959, and the Rules framed thereunder. Section 7 thereof distinctly provided both for the disposal of goods in any manner other than by way of sale in the State and despatching them to a place outside the State. This judgment is thus plainly distinguishable. Again in Khushal Chand Laxmichand v. Commissioner of Sales Tax  48 STC 567, the question before the Bench was whether wheat or jowar, purchased from unregistered dealers which had been supplied under the Foodgrains Levy Order to the Food Corporation of India, was exigible to purchase tax under Section 7 of the Madhya Pradesh General Sales Tax Act, 1958. It is plain from the judgment that therein both title and possession of foodgrains had passed to the Food Corporation of India, but due to the compulsive provision of the Levy Order, it did not constitute a sale stricto sensu. In that peculiar context, the transaction was held to be a disposal of the goods and thus exigible to tax. Plainly enough the observations in this case have no relevance to the present one.
11. To conclude, it must be held both on principle and precedent that a mere despatch of goods out of the State by a dealer to his own branch whilst retaining both title and possession thereof, does not come within the ambit of the phrase 'disposes of the manufactured goods in any manner otherwise than by way of sale', as employed in Section 9(1)(a)(ii) of the Haryana General Sales Tax Act. The answer to the question posed at the very outset is thus rendered in the negative.
12. Once it is held as above, the impugned Notification No. S. O. 119/H. A. 20/73/Ss. 9 and 15/74 dated 19th July, 1974 (annexure P-2), plainly travels far beyond the parent Section 9 of the Act. Whereas the said provision provided only for the levy of a purchase tax on the disposal of manufactured goods, the notification by making a mere despatch of goods to the dealers themselves taxable in essence, legislates and imposes a substantive tax which it obviously cannot. Indeed, its terms run contrary to and are in direct conflict with the provisions of Section 9 itself. There is thus no option but to hold that the notification, which is a composite one, is ultra vires of Section 9 of the Act and is hereby struck down.
13. It is common ground that the impugned assessment orders are appealable. However, the challenge to the very validity of the notification was obviously beyond the scope of the appellate authority and consequently, we have entertained the writ petitions taking into consideration the admitted position that the assessment orders patently rested inter alia on the notification which was sought to be frontally assailed. As a necesssary consequence of the quashing of the notification, the assessment orders are also set aside. This, however, would in no way preclude the Assessing Authority to reassess the matter ignoring altogether the provisions of the impugned notification.
14. The writ petitions are allowed, but in view of the somewhat intricate legal issues involved, the parties are left to bear their own costs.