DIAMOND COAL CO LTD Vs. STATE OF BIHAR

JUDGEMENT

(1.) In this case the petitioner has obtained a rule calling upon the State of Bihar and the other respondents to show cause why a writ in the nature of prohibition should not be issued restraining them from levying or realising tax on sale and purchase of coal outside the State of Bihar.

(2.) The petitioner is Diamond Coal Company, Limited, which is a joint stock company having its registered office at Jharia in the district of Manbhum. The petitioner carries on trade in coal in the various States of India. During the year 1949-50 the petitioner's gross turnover on sale of coal was estimated to be a sum of Rs. 6,11,717/2/9. After allowing for sales to registered dealers and a rebate of 2 per cent, the taxable turnover was determined by the Sales tax authorities to be Rs. 5,98,467. The petitioner claimed that he had sold coal outside Bihar to the value of Rs. 55,862/3/6. The petitioner demanded that this amount should, be exempted from sale tax. On 30-10-1351 the Assistant Superintendent of Sales Tax rejected the claim holding that the petitioner was liable to pay tax even on the quantity of coal sold outside Bihar. The petitioner alleges that he was illegally made liable to pay sale tax of Rs. 790/1/- in excess of what he is really liable to pay.

(3.) In support of the rule, Mr. Basant Chandra Ghosh referred to Section 2(g), Bihar Sales Tax Act, 1947. Section 2(g) defines "Sale" as follows: