BIRENDRANATH GUHA AND COMPANY Vs. STATE OF BIHAR

JUDGEMENT

(1.) IN this case the assessee, Messrs. B. N. Guha and Company, is an incorporated body with its registered office at Calcutta. The company has taken lease of timber forest in Nepal and has built godowns and offices in Nepal territory close to the Jogbani railway station in Bihar State. The company manufactures timber sleepers, squares, logs etc., at their workshop. The company has taken a big railway contract and the bulk of the timber manufactured by it is supplied to the railways and despatched to different destinations from Jogbani railway station after obtaining instructions from the Sleepers Control Office. For the period from 1st of July, 1947, to 31st of March, 1948, the Sales Tax Officer determined the taxable turnover to be Rs. 4,50,061 and imposed sales tax amounting to Rs. 7,032-3-0. The objection of the company was that no sale took place in Bihar since the wooden sleepers were manufactured in Nepal and despatched from Jogbani railway station to places outside the Bihar State. It was conceded on the part of the assessee that the goods were stored in its godown at Jogbani so long as wagons were not available. But the contention of the assessee was that the sale did not take place in Bihar and there was no liability to pay sales tax. The objection was overruled by the Sales Tax Officer. An appeal was taken to the Deputy Commissioner of Commercial Taxes but the appeal was dismissed. The assessee went up to the Board of Revenue in revision. The Board allowed the claim of the assessee to the extent that sum of Rs. 78,211 which represented the sale of timber despatched to the head office at Calcutta was excluded from the taxable turnover of the assessee. As regards the balance of Rs. 3,80,354-12-0 which represented the sale of sleepers to railway, the Board of Revenue affirmed the order of the Sales Tax Officer and dismissed the revision application.

(2.) IN this state of facts the Board of Revenue has referred the following question of law for the opinion of the High Court :- "Whether in the facts and circumstances of this case the firm of Messrs B. N. Guha and Co., is liable to pay sales tax on the sale of timber to the extent of Rs. 3,80,354-12-0 ?"

(3.) ALTERNATIVELY I think that there was appropriation of the goods within the meaning of Section 23(2) of the Sale of Goods Act at Jogbani railway station. It is the admitted position in this case that after the sleepers were passed by the Sleeper Passing Officer the contractor loaded the goods in the railway wagons at Jogbani and despatched the consignments to the various destinations. Paragraph 11(g) of the contract states that such sleepers as are acknowledged by the consignee as possessing the passing mark of the Sleeper Passing Officer and the private mark of the contractor would be deemed to be fully delivered. It is also clear from the terms of the contract that the petitioner delivered the goods to the buyer at Jogbani railway station without reserving the right of disposal. Paragraph 4 states that the Sleeper Passing Officer shall be deemed to be an agent of and acting on behalf of the State and paragraph 11(g) states that such sleepers as possess the passing mark of the Sleeper Passing Officer and the private mark of the contractor shall be deemed to be fully delivered. There is nothing to suggest from the terms of the contract that the contractor reserved the jus dispossendi. Upon the construction of the terms of the contract I am of opinion that there was delivery to the carrier at Jogbani railway station and there was an unconditional appropriation of the goods also within the meaning of Section 23(2) of the Sale of Goods Act.