STATE OF ORISSA Vs. RAJANI TIMBER TRADERS

JUDGEMENT

(1.) THESE are references made under section 24(1) of the Orissa Sales Tax Act (hereinafter referred to as the Act) by the Sales Tax Tribunal at the instance of the revenue. The corresponding account periods are 1965-66 and 1966-67. The question referred for determination is the following :

(2.) TO answer a question of this type one usually asks the question to himself as to whether the action of the dealer has brought about a new commercial commodity different from the one which he had purchased. Timber logs and sized timber are certainly different commodities in the commercial sense though sized timbers are brought out only from timber logs by a particular process. One who has a need of timber logs would not be satisfied if sized timber is offered to him. Similarly one requiring sized timber would not be satisfied if timber logs are supplied. There is a clear distinction between the two and they cater to different types of needs in the commercial market. The learned standing counsel relies upon two decisions reported in Shaw Bros. and Co. v. State of West Bengal ([1963] 14 S.T.C. 878) and Bachha Tewari v. Divisional Forest Officer ([1963] 14 S.T.C. 1067). He also places reliance on the principle indicted in a recent decision of the Supreme Court in Ganesh Trading Co. v. State of Haryana ([1973] 32 S.T.C. 623 (S.C.)). A Bench of this Court had occasion to examine a case of this type, though not relating to timber, in Ram Chandra Badrinarayan v. State of Orissa ([1974] 33 S.T.C. 83; I.L.R. 1972 Cut. 1322), where, relying on a series of decisions, the real test to be applied to a case of this type was indicated. The Supreme Court in the case referred to above (Ganesh Trading Co. v. State of Haryana ([1973] 32 S.T.C. 623 (S.C.)) was dealing with a case of paddy and rice. It was rightly indicated that rice comes out of paddy after undergoing a particular process; yet the two were different commercial commodities and cater to different needs.

(3.) OUR answer to the question, therefore, shall be in the affirmative, namely, the conversion brought about a different commercial commodity, and the sale therefore in violation of the undertaking made the assessee liable to be treated under the proviso to section 5(2)(A)(a)(ii) of the Act. Since there is no appearance for the assessee, we make no order as to costs. Reference answered in the affirmative.