Full Judgment Text
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PETITIONER:
STATE OF MAHARASHTRA & ANR.
Vs.
RESPONDENT:
CHAMPALAL KISHANLAL MOHTA
DATE OF JUDGMENT:
17/03/1970
BENCH:
SHAH, J.C.
BENCH:
SHAH, J.C.
HEGDE, K.S.
CITATION:
1971 AIR 908 1971 SCR (1) 46
1970 SCC (1) 611
CITATOR INFO :
R 1985 SC1293 (45)
ACT:
Bombay Sales Tax Act (51 of 1959) as amended by the
Maharashtra Act (15 of 1967), S. 2(7)--"Goody" including
standing timber agreed to be severed--Sale of standing trees
agreed to be severed under contract--If ’sale of goods’
liable to sales tax.
HEADNOTE:
The contract of sale entered into by the respondent
expressly provided that the timber agreed to be sold shall
be severed. The High Court held that the sale of standing
trees was not a sale of goods chargeable to sales tax under
the Bombay Sales Tax Act, 1959. and the decision was
confirmed by this Court on appeal. But after the judgment
of the High Court and before the appeal was heard in this
Court, the expression "goods" in the Act was amended by
Maharashtra Act 15 of 1967 with retrospective operation, so
that, it included at all relevant times, standing timber
agreed to be severed before sale or under the contract of
sale.
In a petition for review to this Court,
HELD : Since the judgment of this Court suffers from an
error apparent on the face of the record, the judgment
should be reviewed and the appeal allowed. [47C]
A State Legislature may not extend the import of the
expression sale of goods" so as to impose liability for tax
on transactions which are not sales of goods within the
meaning of the Sale of Goods Act. But, by the inclusive
definition in s. 2(7) of the Sale of Goods Act, things which
are attached to the land may be the subject matter of
contract of sale provided that under the terms of the
contract they are to be severed before sale of under the
contract of sale. The timber in the present case was
therefore "goods" within the meaning of s. 2(7) of the Sale
of Goods Act. Since the expression " sale of goods" in
Entry 54, List II, of the Constitution has the same meaning
as that expression has in the Sale of Goods Act, the
amendment is valid. [47 H; 48 A-E]
The State of Madras v. Gannon Dunkerley, [1959] S.C.R. 379
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and Pandit Banarsi Das Bhanot v. The State of Madhya
Pradesh, [1959] S.C.R. 427, referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Review Petition No. 29 of
1969.
Application for review of this Court’s Judgment dated July
17, 1969 in Civil Appeal No. 1878 of 1967 arising out of the
judgmentand order dated July 18, 1966 of the Bombay High
Court, Nagpur Bench in Special Civil Application No. 722 of
1965.
N. S. Bindra and S. P. Nayar,for the petitioner/appellants.
A. G. Ratnaparkhi, for the respondent.
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The, Judgment of the Court was delivered by
Shah, J. Appeal No. 1878 of 1967 was ordered to be dismissed
by this Court on July 17, 1969. The Court held that the
sale of standing trees is not sale of goods chargeable to
sales tax under the Bombay Sales Tax Act, 1959.
A petition for review of Judgment has been filed by the
State contending that after the judgment of the High Court
and before the appeal was heard, the Bombay Sales Tax Act,
1959 was amended by the Maharashtra Act 15 of 1967 with
retrospective operation, and by the amendment standing
timber was included ’in the definition of timber, but
counsel for the State failed to invite the attention of the
Court to that Act. Since the judgment of this Court it is
claimed suffers from an error apparent on the face of the
record, we have granted review of judgment.
The expression "goods" was defined in s. 2(13) of the Bombay
Sales Tax Act, 1959. By Maharashtra Act 15 of 1967 by s. 2
the definition of "goods" was altered by providing that
"In section 2 of the Bombay Sales Tax Act,
1959 . . . in clause (13), after the words
’and commodities’ the following shall be, and
shall be deemed always to have been, added,
namely:-
’and all standing timber which is agreed to be severed
before sale or under the contract of sale’."
The definition was retrospective in operation and the
expression " goods" included at all relevant times standing
timber agreed to be severed before sale or under the
contract of sale.
The expression "sale of goods" in Entry 54 List 11 of Sch.
VII of the Constitution has the same connotation as it has
in the Sale of Goods Act, 1930. This Court in The State of
Madras v. Gannon Dunkerley & Co. (Madras) Ltd.(1) observed
that the expression "sale of goods" was, at the time when
the Government Of India Act, 1935, was enacted, a term of
well-recognised legal import in the general law relating to
sale of goods and in the legislative practice relating to
that topic and must be interpreted in Entry 48 in List 11 in
Sch. VII of the Act as having the same meaning as in the
Sale of Goods Act, 1930 : see also Pandit Banarsi Das Bhanot
v. The State of Madhya Pradesh (2). The expression " sale
of goods" in Entry 54 in List II of Sch. VII of the Consti-
tution has also the same meaning as that expression had in
Entry 48 in List II of the Government of India Act, 1935.
The State Legislature may not therefore extend the import of
the expression
(1) [1959] S.C.R. 379.
(2) [1959] S.C.R. 427.
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" sale of goods" so as to impose, liability for tax on
transactions which are not sales of goods within the meaning
of the Sale of Goods Act.
By Art. 366(12) of the Constitution the expression "goods"
is defined as inclusive of "all materials, commodities and
articles". That is, however an inclusive definition and
does not throw much light on the meaning of the expression
"goods". But the definition of "goods" in the Sale of Goods
Act, 1930, as meaning "every kind of moveable property other
than actionable claims and money; and includes stock and
shares, growing crops, grass, and things attached to or
forming part of the land which are agreed to be severed
before sale or under the contract of sale". Standing timber
may ordinarily not be regarded as "goods", but by the, in-
clusive definition given in s. 2(7) of the Sale of Goods Act
things which are attached to the land may be the subject-
matter of contract of sale provided that under the terms of
the contract they are to be severed before sale or under the
contract of sale.
In the present case it was expressly provided that the
timber agreed to be sold shall be severed under the contract
of sale. The timber was therefore "goods" within the
meaning of s. 2(7) of the Sale of Goods Act and the
expression "sale of goods" in the Constitution in Entry 54
List 11 having the same meaning as that expression has in
the Sale of Goods Act, sale of timber agreed to be severed
under the terms of the contract may be regarded as sale of
goods.
The appeal is allowed and the petition filed by the
respondent must be dismissed. Since the State succeeds in
this appeal, relying upon a statute which was passed after
the judgment of the High Court, there will be no order as to
costs throughout.
V.P.S. Appeal allowed.
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