STATE OF ORISSA & OTHERS v. • THE TITAGHUR PAPER MILLS COMPANY LTD.

(I) Notification S.R.O. No. 372/77 dated May 23, 1977, (2) Notification S.R.O. No. 373/77 dated May 23, D, 1977, (3) Entries Nos. 2 and 17 in the Schedule to Notifi· cation No. 67178-C.T.A. 135/77 (Pt.)·F <S.R.O. No.900/77) dated December 29, 1977, and (4) Entries Nos. 2 and 17 in the Schedule to Notification No, 67181-C.T.A. 135/77-F . (S.R.0. No.901/77) .dated . December 29, 1977, levying purchase tax at the rate of ten per cent on the purchase of E bamboos agreed to be severed and standing ·trees agreed to be severed, are not ul.tra vires either Entry 54 in List II.in the Sevrnth Schedule to the Constitution of India or the Orissa Sales Tax Act, 1947, but are ·constitutional and valid. F (2) Under the impugned provisions the taxable event is not an agreement to sever standing trees or bamboos · but the purchase of standing trees or barn boos agreed to be severed.

(3) The absence in the impugned provisions of the G' words "before sale or under the contract of sale" is im- material for theimpugned provisions read as a whole clea· ( rly show that the severance of standing trees or bamboos \ has to be under the contract of sale and. before• !lie pur- chase thereof has been completed . and not. before sale of such trees or bamboos. H '

146 SUPREME COURT REPORTS \ (1985] 3 S.C.R •. ) · (4) The subject-matter of the impugned provisions is goods and the tax that is levied thereunder is on a comp- leted purchase of goods.

(5) When under section 3-B of the Orissa Sales Tax Act, 1947, any goods are declared to be liable to tax on the turnover of purchases, such goods automatically cease - ·--< to be liable to sales tax by reason· of the proviso to that section •

. (6) The word "supersession" in the Notifications dated December 29, 1977, is used in the same sense as the words "repeal and replacement" and, therefore, does not c have the effect of wiping out the tax liability under the previous notifications. All that was done by .using the wo-rds "in supersession of all previous notifications" in the Notifications dated December 29, _1977, >yas to repeal and replace previous notifications and not to wipe out any · · liability incurred under th~ previous notifications.

The Timber Contracts are not works contracts but are agreements to sell standing timber.

_Under the Timber Contracts the property in the trees which were the subject-matter of the contracts passed to E the Respondent Firm, Messn M.M. Khara, only in the trees v. hich were felled, that is, in timber, after all the Conditions of the contract had been complied with and after such timber was examined and checked and removed --from the contract area. The impugned provision·s, there- F fore, did not apply to the transactions covered by the • Timber Contracts. '

(9) The dictionary meaning of a word cannot befooked at where that word has been- statutorily defined or judi- cially interpreted but wher.e there is no such definition or interpretation, the court may take the aid of dictionaries to ascertain the meaning of a word in common parlance, bearing in mind that a word is used in· different senses according to its context and a dictionary gives all the meanings of a word, and the court has; the_refore, to select particular meaning which is r~levant to the content in which it has to interpret that word. ·

OIRSSA v. TITAGHUR PAPER MILLS (Madon, J.) 147

(LO) Timber and sized or dressed logs are one and the same commercial commodity. Beams, rafters and planks would also be timber.

(11) As the sales of dressed or sized. logs by the Res- pondent Firm have already been assessed to sales tax, the salesto the First Respondent Firm of timber by the State B Government from which logs were made by the Respondent Firm cannot be made liable to sales tax as it would amount to levying ta.x at two points in the saRJe series of sales by successive dealers, assuming without decidi•g that the retrospectively substituted definition of "dealer" in clause (c} of section 2 of the Orissa Sales Tax Act, 1947, c is valid.

(12) During the period June l, 1977, to December 31, 1977, the sales of logs by the Respondent Firm would be liable to tax at the rate of ten per cent. Assuming that these sales have been assessed to tax at the D rate of six per cent, by reason of the period of limitation prescribed by section 12(8) of the Orissa Sales Tax Act, 1947, the Respondent Firm's assessment for the relevant period cannot now be reopened to reassess such sales at ten per cent E (13) The Bamboo Contract is not a lease of the contract areas to the Respondent Company, The Titaghur Paper Mills Company Limited.

(14) The Bamboo Contract is also not a grant cf an F easement to the Respondent Company.

(15) The Bamboo Contract is a grant of a profit a prendre which in Indian law is a benefit to arise out of land and thus creates an interest in immovable property. 6 (16) Being a benefit to arise out of land, any attempt on tl_ie part of the State Government to tax the amounts payable under the Bamboo Contract would be not only ultra vires the Orissa Act but also unconstitutional as being ·beyond the State's texing power under Entry 54 in List II i!l the seventh Schedule to the ConstihJtion of India. ff

148 .Sl!PRBME COURT REPORTS (1985] 3 s.c.R . (17) The case of Firm Chh1tabha{ Jethabai Patel & Co. v. The State of Madhya Pradesh is not good law and has been overruled by decisions of larger Benches of this Court as pointed out by this Court in State of Madhya Pradesh v.

Yakinuddin. B (18) The case of State of Madhya Pradesh & Ors v. Orient Paper. Mills Ltd. is also not good law as that decision .was given per incurium and laid down principles of interpretation which are wrong in law.

(19) The real nature of a document and the transaction c thereunder have to be determined with reference to all the terms and clauses of that document and all the rights and results flowing therefrom.

On the above conclusions reached by us the judgment of the D High Court in so far as it hold the impugned provisions to be unconstitutional and ultra vires the Orissa Sales Tax Act, 1947, requires to be reversed. This, however, does not mean that the writ petitions filed by the Respondent Company and the Respondent Firm in the High Court should be dismissed because in its writ petitions the Respondent Company had prayed for quashing the notice dated August 18, 1977, issued against it under Rules 22 and 28(2) of the Orissa Sales Tax Rules, 194 7, and the Respondent Firm in its writ petition had prayed for setting aside the assessment order dated November 28, 1978, for the priod April !, 1977, to March 31, 1978. · On the findings given by us the said notice must be quashed. So far the said assessment order is concerned, as we have pointed out earlier, it is severable· and does not require to be _\,.--- ( set aside in toto but only so far as it imposed purchase tax on the ' amounts paid by the Respondent Firm under the Timber Contract. Though the High Court did not give these consequen- tial reliefs in view of its findings that the impugned provisions were invalid, it becomes necessary for us to do so in order to do complete justice between the parties as we are entitled to do under Acticle 142 of the Constitution of India.

In the result, we reverse the judgment of the High Court in so for as it holds (I} Notification S.R.O. No. 372/77 dated May 23. H 1977, issued under section 3-B of the Orissa Sales Tax Act, 1947,

f 6iRSSA v. TiTAGHUR PAPER Mir.LS (Madon, j,) 149 (2) Notification S.R.O. No. 373/77 dated May 23, 1977, issued nnder A • the first proviso to sub-section (I) of section 5 of the sa;d Act prior to the amendment of the said sub-section by the Orissa Sale Tax (Amendment) Act, 1978, which repealed and replaced the Orissa Sales Tax (Amendment) Ordinance, 1977, (3) Entries 2 and 17 in the Schedule to Notification No. 67178-C. T.A. 135/77 (Pt.)·F (S.R.O. No. 900/77) dated December 29, 1977, issued under the said B section 3-B and (4) Enteries No. 2 and 17 in the Schedule to Noti- fication No. 67181-C.T.A. 135/77-F (S.R.O. No. 90li77) dated December 29, 1977, issued under sub-section (I) of the said section 5 after its amendment by the Orissa Sales Tax (Amendment) Act, 1978, to be unconstitutional as being ultra vires Entry 54 in fast II in the Seventh Schedule to the Constitution of India and as c being ultra vir" tho Orissa Sales Tax Act, 1947, and we declare these provisions to be constitutional and valid. In Civil Appeal No. 219 of 1982, we further quash and set aside the notice dated August 18, 1977, under Rules 22 and 28(2) of the Orissa Sales Tax Rules 1947, issued against the Respondent Company, The Titaghur Paper D Mills Company, Limited, and the assessment order, if any, made in pursuance thereof. Jn Civil Appeal No. 220 of 1982, we further modify the assessment order dated November 28, 1978, for the period April I,. 1977, to March 31, 1978, made against Respondent Firm; Messrs M.M. Khara, by deleting therefrom the item of purchase tax on the amounts paid by the Re.spondent Firm under the Timber E Contracts entered into by it with the State of Orissa and direct consequential modifications to be made therein.

As the real object of the State Government in making the mpugned provisions was to make exigible to purchase tax ·the amounts payable under the Bamboo Contracts and the Timber F Contracts in which object it has failed, in our opinion, a fair order for costs would be that the parties should bear and pay their own costs of these Appeals and we direct accordingly.

P.B.R.