STATE OF ORISSA Vs. IQBAL BROS

JUDGEMENT

(1.) THIS is a reference under section 24(1) of the Orissa Sales Tax Act, 1947 (hereinafter referred to as "the Act"), at the instance of the Revenue on the following question of law :

(2.) THE dealer carries on business of purchase and sale of mahua flower which is liable to purchase tax under section 3-B and was registered under the Act. For the year 1978-79, he was assessed to the best of judgment as envisaged under section 12(4) of the Act. The dealer paid purchase tax on the royalty paid to the State Government. The Sales Tax Officer, however, held that sale price of mahua flowers included royalty which is charged by the dealer when he sells the goods. Accordingly, the prevailing market rate at which mahua flower is sold at the time of purchase by the dealer would be the purchase turnover of the dealer. In appeal, the Assistant Commissioner confirmed the same. Accepting the accounts, Tribunal held that after taking lease of mahua trees, the dealer was collecting mahua flower and is thus, the first purchaser whose purchase price was the royalty. On this finding, relying on the principle decided in [1971] 27 STC 176 (Orissa) (P. R. Tata and Co. v. Sales Tax Officer), where harida was collected from forest on payment of royalty, the Tribunal held that royalty is the purchase price on which purchase tax is leviable.

(3.) IN view of our discussion, on the facts and in the crcumastances, the question is answered in the affirmative against the Revenue. No costs. Reference answered in the affirmative.