BHANAKHAP MICA MINING CO Vs. STATE OF BIHAR

JUDGEMENT

(1.) This is a reference under Section 25(1) of the Bihar Sales Tax Act, 1947 (hereinafter called the Act) made by the Commercial Taxes Tribunal, Bihar. It has referred the following question of law for determination by this court: Whether, in the facts and circumstances of the case, the transaction under consideration constitutes a sale and is liable to be assessed under the Central Sales Tax Act, 1956?

(2.) The facts of the case may be largely taken from the statement of the case prepared by the Tribunal and they are these: The period in question is 1st July, 1957, to 30th June, 1959, governed by the 1947 Act. The assessee-company supplied beryl and columbite minerals which are said to be used in atomic energy plants by the Government of India. The supply at the relevant time was controlled under the Atomic Energy Act, 1948. Various orders were issued by the Atomic Energy Department of the Government of India from time to time under the said Act. The assessee was assessed under Section 13(5) of the Act, originally, to pay Central sales tax on the turnover of the above two minerals. It went up in appeal. The appellate authority found that there was no proper investigation in this case and so it remanded it to the assessing officer to find out whether there was a valid acquisition order under the Central Act of 1948 in respect of the supply made by the assessee. After the remand, the assessing officer, on examination of the papers produced by the assessee, came to the conclusion that it had failed to prove that the prescribed substance was supplied to the Government against any acquisition order. The assessing authority held again that the transactions amounted to sales within the meaning of the Central Act and was chargeable to sales tax under it. The appeal filed by the assessee as also the first revision failed. The matter was taken up in second revision before the Tribunal. The Tribunal also dismissed the revision, holding that the transactions in question were sales. On being asked to refer a case to this court, it has done so under Section 25(1) of the Act.

(3.) A few more facts may be stated from the assessment order passed after remand and from the order of the Tribunal. In the former, it is recorded that the dealer did not produce any vaild acquisition order, but it produced a copy of the agreement dated 15th October, 1958, entered into between the assessee-company and the Atomic Energy Department of the Government of India. In this agreement the dealer has been described as the seller and the Atomic Energy Department as the buyer. It is also mentioned in it that the seller has agreed to sell the stock of columbite tantalite ores of certain specification on certain terms agreed to between the dealer and the buyer. Clause 5 of the agreement contemplated certain conditions for acceptance or rejection of the beryl ore supplied by the dealer. Clause 7 provided that the purchaser should have the right to reject the whole consignment and return it to the seller at its cost and recover the expenses incurred by the purchaser from the seller. One of the provisions in the agreement was that if the seller did not perform and discharge its obligation to the satisfaction of the purchaser or if the former did not supply any materials for a continuous period of six months, the latter was to be at liberty to terminate the agreement without any notice to the seller.