MUNINAGAIAH Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) THE petitioner is a forest contractor. He has come up before this Court for a declaration that the contract entered into between him and the Forest Department, "to collect, remove and dispose of "tamarind" is not one of sale but is that of a grant of right in the nature of profit a prendre and therefore the respondents had no authority in law to collect sales tax on the amounts paid under the said contract. Prayer is also for quashing the order dated December 13, 1993 (annexure J) passed by the respondent-Deputy Conservator of Forests, whereunder he has rejected the application filed by the petitioner for refunds of the amounts collected as sales tax by the Forest Department.

(2.) NOW , some of the admitted facts. The Forests Department, on regular basis sells right to collect tamarind in specified forest areas through public auction as per the provisions of the Karnataka Forest Act, 1964 (For short "the Forest Act") and the Rules framed thereunder. Mr. R. I. D'sa, learned Additional Government Advocate, has placed on record the specimen of one of such agreements, which according to him is the standard form which is adopted by the department in case of all such auction sales. This specimen agreement is for the years 1993-95. I am adopting the terms and conditions of this agreement for the purpose of weighing the rival contentions and to ascertain the true intent and purport of the transaction, i. e. , whether the agreement is one for sale of tamarind or it is merely a sale of right to collect tamarind from the forest lands ?

(3.) NOW , some of the important conditions incorporated in the agreement may be summarized. Under condition No. 2 (a) the purchaser has to pay the outstanding dues in three equal instalments on or before December 31, 1993, March 31, 1994 and June 31, 1994. Under condition No. 6 the contractor is to submit from time to time, to the Deputy Conservator of Forests, the name and address of every person whom he may employ as his agent superintending the work of the contract who has to be provided a written authority by the contractor for the same. Under condition No. 90 (a) the contractor has been prohibited from sub-letting or assigning his contract or any portion thereof, or share of interest therein, to any person, whatsoever, without the previous permission of the Conservator of Forests. Under condition 10 (a) the contractor is stopped from interfering with any villager or villagers who may be permitted by a forest officer to collect and remove any produce which he is entitled to remove by virtue of any right or privilege under the provisions of the Forest Act, etc. Condition No. 11 provides that in the collection of produce, no damage shall be done to the trees by the lopping or breaking of branches or otherwise except in so far as it is necessitated by the nature of the produce collected; and no immature produce shall be collected.