S VENKATARAMAN Vs. STATE OF MADRAS

JUDGEMENT

(1.) THE petitioner in these two revisions is the proprietor of a construction company. He had acquired the right of removing sand from certain areas of Cooum river in an auction conducted by the Revenue Department. Instead of working out his right by the removal of sand, what he did was to permit the removal of the sand by other persons on payment of Re. 1. 50 np. per lorry load. He made no return under the General Sales Tax Act. On a check of his accounts, it was held that the amounts realised by the petitioner in connection with the removal of sand represented realisations out of sale of sand and that the turnover in this regard was assessable to tax. Assessments were made upon him accordingly for the two years 1959-60 and 1960-61. THE petitioner appealed objecting to the levy of sales tax, his principal contention before the appellate authority being that he had only leased out his right to various buyers, who quarried the sand and took it away. According to him, the sales were involved in such quarrying contracts and were exempt under the relevant notification issued by the Government. This contention was not however accepted. THE Appellate Assistant Commissioner observed that the petitioner had in effect purchased sand lying in the river bank, and as the sand is in a readily removable state, no quarrying was involved. He himself did not use the sand in any of his works, but he sold it to others. It was also held by the appellate authority that there was no sub-lease at all, either oral or written. THE exemption was held not to apply.

(2.) THERE were further appeals to the Tribunal. The Tribunal accepted the view of the Appellate Assistant Commissioner and dismissed the appeals. In these revision petitions, Mr. C. Venkataraman, learned counsel for the petitioner, has put forward the very same contentions. It has again been pressed before us that the authorities below should have accepted the contention of the petitioner that he had only sub-let his right of removal of sand. According to the learned counsel, it was only a licence that was given to the purchasers, such licence covering the right to quarry the sand and take it away. It would therefore follow, so it is argued, that if at all any sale is involved, it is involved in a quarrying contract and that the relevant exemption must apply. We are unable to accept this contention. In the first place, it is not in dispute that the petitioner had obtained at an auction the right to remove sand from certain portions of the Cooum river. It is not the petitioner's case that that right covered any quarrying contract. What the petitioner subsequently did was to permit persons who required sand to remove the sand from the area over which he had obtained the right referred to and he charged a sum of Re. 1. 50 np. in respect of every lorry-load of sand so removed. It is perfectly plain that what the petitioner did was to sell one lorry-load of sand for a specified figure. Virtually, what he told the purchasers was, "here is sand belonging to me. You can remove it on payment of this sum for every lorry load. " *