Sarjoo Prosad, C.J.
1. This is an application under Article 226 of the Constitution of India, praying for appropriate writs against the opposite parties, preventing them from enforcing the provisions of the Assam Sales Tax Act, 1947 (Assam Act XVII of 1947, as amended) against the petitioner, and compelling him to get himself registered as a 'dealer' and to submit returns. The petitioner is the holder of what is known as the Bijni Raj Estate.
2. Within the ambit of his zamindari, there are sal forests, which are divided into coupes, and standing sal trees are settled every year in different coupes and lots by auction--usually to the highest bidder. The settlement-holders are permitted to fell the sal trees and market them by sawing and other processes, for sale. The Superintendent of Taxes, Dhubri, issued a notice on the petitioner under section 10 of the Assam Sales Tax Act, 1947, on 14th September, 1953, requiring him to apply for registration as a 'dealer' under the said Act, or to show cause why he should not be so registered. The petitioner showed cause stating, inter alia, that he was not a dealer, as defined in section 2(3) of the Act, and that he did not carry on any business of selling or supplying goods, as defined in the Assam Sales Tax Act. The disposal of the sal trees in the manner indicated earlier, according to the contention of the petitioner, did not attract the provisions of the Act. He further asserted that the disposal of standing sal trees was, in effect, disposal of immovable property, and, as such, beyond the scope of the Act. The Superintendent of Taxes, however, insisted that the petitioner should get himself registered as a dealer. The petitioner then filed a written objection before that officer reiterating the grounds mentioned above. The objection was not entertained by the officer as he persisted in the view that the petitioner was liable to be taxed under the provisions of the Act, and, by his letter, dated 6th February, 1954 called upon the petitioner to apply for registration, and also to submit returns for various periods beginning from 31st March, 1951. and ending with 30th September, 1953. The officer further observed that in case of the petitioner's failure to comply with his directions and to submit returns, he would be liable to be summarily assessed and compulsorily registered.
3. The petitioner then moved an application before this Court under Article 226 of the Constitution of India, but withdrew the same when it was pointed out that the petitioner should seek his relief before the appropriate authorities. He then appears to have presented an application under section 31 of the Assam Sales Tax Act before the Commissioner of Taxes, Assam (respondent No. 2) for quashing the order passed by the Superintendent of Taxes, Dhubri (respondent No. 1). This officer, after hearing the petitioner, reserved orders, and ultimately disposed of the matter by an order dated 9th December, 1954, in which he held against the contentions of the petitioner. He found that the sale of the sal trees in question was sale of movables falling within the purview of the Sales Tax Act, and that the petitioner was carrying on business in such sale and was, therefore, liable to be registered and taxed under the provisions of the law. The petitioner complains that he had no knowledge of this order until 29th June, 1955, when he received a letter from the Superintendent of Taxes, Goalpara (respondent No. 3) asking him to apply for registration on or before 7th July, 1955. The notice referred to the order in question passed by the Commissioner of Taxes, and stated that a copy of the order had been sent to the petitioner's Dewan on 6th January, 1955. In this notice, the officer again directed the petitioner to furnish returns for the various periods beginning from 1st October, 1953, to 31st March, 1955. The petitioner thereafter obtained a copy of the order passed by the Commissioner of Taxes and then presented this application.
4. The learned Advocate-General appearing on behalf of the Taxing Department, has raised a preliminary objection to the entertainment of the application. He contends that the remedy of the petitioner was to apply to the Board of Sales Tax, Assam, for a reference to the High Court on any question of law arising out of the order of the Commissioner, and the petitioner not having done that, this application should fail in limine. He relies upon a decision in Dharam Chand Kishore Chand Puri and Brothers v. The Excise and Taxation Commissioner A.I.R. 1953 Punj. 27 where it has been observed that an application for a writ under Article 226 of the Constitution should not be allowed to short-circuit the procedure which is laid down under the Sales Tax Act itself. The appropriate remedy for the party concerned is to follow the procedure provided by the Act itself, and if he fails to avail himself of it, the High Court would not interfere under Article 226 of the Constitution. The learned Advocate-General also refers to the judgment of the Supreme Court in the well known case of Bengal Immunity Co., Ltd. v. State of Bihar A.I.R. 1955 S.C. 661 and contends that even if a remedy were available to the petitioner under Article 226 of the Constitution, it could be only available where the constitutionality of the legislation itself was in question, and that where the vires of the legislation is not in question, there is no reason why the petitioner should not be compelled to seek his ordinary remedies under the Act itself.
5. The decision in the Bengal Immunity case, A.I.R. 1955 S.C. 661 in our opinion, does not help the contention of the learned counsel. It is true that, in that case, the vires of the legislation itself was canvassed on the ground that the said Act was in conflict with Article 286 of the Constitution ; but the decision does not lay down that even though a particular legislation may not be applicable to the petitioner, he should be forced to seek his remedy under that legislation in spite of the tedious process that may be involved in adopting that course. It was argued in that case that the application presented to the High Court under Article 226 of the Constitution was premature as all that had happened was that the petitioner company in that case had been served with a notice calling upon the company to get itself registered as a dealer and to submit a return. Their Lordships, however, pointed out that when an order or notice emanates from the State Government or any of its responsible officers directing a person to do something, then, although the order or notice may eventually transpire to be ultra vires and bad in law, it is obviously one which prima facie compels obedience as a matter of prudence and precaution. It is, therefore, not reasonable to expect the person served with such an order or notice to ignore it on the ground that it is illegal, for, he can only do so at his own risk and peril, and a person placed in such a situation has the right to be told definitely where exactly he stands and what he may or may not do in the present case. Therefore, if it is held that the Act had no application to the case of the petitioner, the notice issued by the authorities on him to get himself registered and to submit returns, would be equally void and illegal, and it is, therefore, open to him to question the validity of such a notice even by an application under Article 226 of the Constitution. Their Lordships further observed in the Bengal Immunity case, , A.I.R. 1955 S.C. 661 that the remedy under the Act, which was challenged as ultra vires and void, could not be said to be adequate, and was indeed nugatory or useless where the Act itself was challenged on the ground of its being ultra vires and where the rights of a party were threatened to be infringed by any procedure adopted under such a law. This, however, does not mean that in appropriate cases where the Act itself is not challenged as ultra vires, the party concerned cannot apply for a writ under Article 226 of the Constitution even where the action taken by the authorities, though purporting to be under cover of the Act, is ultra vires that law. The learned counsel for the petitioner has further submitted that the proceedings in this case were initiated by a notice served under section 10 of the Act on 14th September, 1953, whereas the amended provisions of section 32 of the Act were introduced by Assam Act XII of 1954. He, therefore, submits that there could be an objection raised against him on the ground that the petitioner could not have the advantage of that section. It is well settled that in appropriate cases, the High Court can always interfere by prerogative writs where it finds that manifest injustice is likely to result from unauthorised and unwarranted acts of the taxing authorities which are not sanctioned by the law: See Behubar Co., Ltd. v. Commissioner of Taxes A.I.R. 1957 Assam 61. It was also held in Hanuman Prasad Agarwalla v. Rabindralal Barua A.I.R. 1956 Assam 114 that although, by the amendment of section 32, a remedy, by way of reference, had been provided for, the assessment order in that case was governed by the Act of 1947 independently of the changes made in 1954, and, on the terms of section 32, as it then stood, no reference lay. In the circumstances, the remedy of the aggrieved party was to come to this Court and seek appropriate directions or writs under Article 226 of the Constitution. We are, therefore, not inclined to entertain the preliminary objection of the learned Advocate-General. It may be also added that a Rule nisi has already been issued by this Court and the records have been called for. That being so, no useful purpose will be served by directing the petitioner to seek for a reference to this Court on the same questions which have been raised in this application, by the procedure laid down under section 32 of the Act, as that will merely involve multiplicity of proceedings without any advantage to any party.
6. We have, therefore, now to deal with the questions raised in the application. The learned counsel for the petitioner has urged that the petitioner is not carrying on business as a 'dealer' and he is, therefore, not a 'dealer' as contemplated by section 2(3) of the Act. A 'dealer', as defined in the Act, means 'any person who carries on the business of selling or supplying goods'. It is not necessary to refer to the other parts of the section. It is contended that, on the admitted facts of this case, all that the petitioner does, even on the findings of the Commissioner, is that he sells the standing sal trees with an implied agreement that they would be severed from the earth and removed by the purchasers.
7. The learned counsel contends that this does not in any sense amount to carrying on the business of 'selling' or 'supplying'. These expressions have been considered in various decisions, in all of which it has been laid down that the words 'carrying on business' connote a continuous trade or occupation involving time and labour as also some investments, which may be regarded as an independent trade or occupation by itself capable of being sold or transferred as such. Here, the trees which were sold, had grown spontaneously upon the land of the petitioner, and they were sold, not as an independent business, but as part of the rights which he had in the zamindari of disposing of the timber grown on his land. A transaction of this nature could not, therefore, have the attributes of a business in the legal sense of the term. The point arose for consideration in Raja Visheshwar Singh v. Province of Bihar A.I.R. 1952 Pat. 129. There the proprietor who possessed extensive zirat lands, grew various kinds of crops thereon, and, after meeting his personal requirements, a portion of the excess, which was not required, was sold. The Sales Tax Officer concerned served a notice on him to get himself registered as a dealer. The proprietor denied his liability to furnish the returns or produce papers, but, as the Department persisted, he instituted a suit claiming a declaration that he was not a 'dealer' under the Sales Tax Act (Bihar Act IV of 1944), and was, therefore, not liable to be registered ; and for an injunction against the authorities preventing them from realising any tax from him. One of the questions, therefore, which arose for consideration by the learned Judges in that case was whether the petitioner was a 'dealer' within the meaning of the Act. In the Bihar Act again, the words were identical, namely, whether the person 'carried on the business of selling or supplying goods', and it was held that the mere fact that he sold agricultural produce or foods would not constitute him a ' dealer', because that was not an independent business which he had been carrying on. Reference was made also to various provisions of the Act, from which it appeared that the term 'business' meant a business which had a separate entity of its own and which, by itself, could be transferred under the law, and, therefore, it could not be argued that a person could transfer or sell a business which was 'inextricably connected with the ownership of the villages in which the lands producing the goods are situated'. Reference was also made to various other provisions of the Act regarding keeping of accounts by dealers. Therefore, where the business did not exist independently of its own, apart from the ownership of the lands, the produce whereof had been sold, it could not be argued that the party concerned was carrying on a business of selling or supplying goods.
8. In the present case, there was no independent operation carried on by the petitioner in any sense of the term ; all that he was doing was to dispose of the standing sal trees by taking money from the persons to whom they were sold ; and the process of cutting, sawing, stacking, transporting or selling the timber, was entirely the business of the persons to whom the timber had been sold, with which the petitioner had nothing to do. The decision in Ramakrishna Deo v. The Collector of Sales Tax, Orissa A.I.R. 1955 Orissa 164 supports the same proposition, and the facts are also very much parallel. In that case, a person leased out a right to cut and remove timber from his forest and to prepare sleepers, in return for a proportionate amount of sale price of sleepers as royalty. Panigrahi, C.J., held that even on the assumption that the contract amounted to a sale, the petitioner could not be assessed to tax unless he was held to be a 'dealer' within the definition of the Orissa Sales Tax Act, wherein also a dealer was defined as 'a person carrying on the business of selling or supplying goods'. The learned Chief Justice held that the element of 'purchase' was one of the necessary ingredients of the business, as contemplated by the Act and that this element was lacking in the circumstances of that case. He further pointed out that if the lessor had engaged himself in the business of planting trees and selling them, after converting them into sleepers, the position would be different; but where there was neither selling nor manufacture of the goods in question by the lessor, it could not be argued that he was carrying on the business of selling or supplying goods, and, as such, was liable to be taxed under the Sales Tax Act. Reliance was placed by the learned Chief Justice upon the decision in the Patna case referred to above. A significant dictum, which is quoted there, occurs in the judgment of the Privy Council in Producers Co-operative Distributing Society v. Commissioner of Taxation [1948] 16 I.T.R. Supp. 87. The Privy Council observed thus:--
Their Lordships are prepared to assume that, did the farmer himself make the butter, such butter would be an agricultural product within the meaning of the definition. In such a case, the farmer uses or cultivates his land for the production of butter just as he uses or cultivates it for production of milk and cream. But, from the fact that butter may be an agricultural product, as defined, it does not, in their Lordships' view, follow that butter which is not solely the product of the farmer's use or cultivation of his land must also be an agricultural product as defined. In this particular case, such use or cultivation results only in one definite product--cream. At that stage, a distinct organized industry appears on the scene. 9. This passage is significant because it lays stress upon a distinct organized industry appearing on the scene, and it is only then that it can be regarded as an independent business. So long as there was nothing to indicate that there was an independent business carried on by the petitioner, he could not be regarded as a dealer. Mr. Justice Narasimham, in a separate judgment, also opined, on an examination of the various provisions of the Orissa Act, that, by the expression 'business of selling' in the Act and Rules framed thereunder, the Legislature meant not the sale by the owner of the produce from his lands or forests, but the sale after purchase or sale after manufacture. The learned Judge also pointed out that this was in consonance with the accepted construction put on the expression 'business' occurring in section 2 (4) of the Indian Income-tax Act. 'Business' there had more extensive meaning than the word 'trade', but, ordinarily speaking, 'business' is synonymous with 'trade'. Two characteristics, therefore, appear to be essential, namely, that business implies (1) sale after purchase or (2) sale after manufacture of the goods, and where none of these elements is present, it cannot be regarded as 'business', as contemplated by the Sales Tax Act.
10. In the Assam Act also, we find that there are cognate provisions for maintenance of accounts and for sale of such business [vide sections 12(3) (a), 43,44 and 48 (1) (a)]. The petitioner obviously could not sell his business in this case without selling his zamindari properties or the villages where the sal trees in question grew. Therefore, it could not be said that this was an independent business. On the contrary, it was inextricably bound up with his proprietary rights in the land or in the villages where the trees grew. In the circumstances, there is great force in the contention of the learned counsel for the petitioner that he is not a 'dealer' under section 2(3) within the meaning of the Act.
11. Another case to which reference may be profitably made in this connection is a decision in State of Bombay v. Ahmedabad Education Society A.I.R. 1956 Bom. 673. There again, emphasis was laid on the fact that it was clear from the definition of 'dealer' that it was not merely the fact of selling, as defined in the Act, which constituted a person a 'dealer'. The activity which the person must indulge in is not merely the activity of selling in the sense of transferring property in goods, but it must be the activity of carrying on the business of selling or supplying goods. Even though it may be a periodical process, in other words, from year to year, that the petitioner may have been disposing of the sal trees, in our opinion, the transaction in this case lacks the essential attributes of carrying on a business as such. There is neither any element of purchase, nor any element of manufacture involved in the process, nor is the business an independent business, as such. We must, therefore, uphold the contention that the petitioner is not a 'dealer' within the meaning of the Act, and, as such, is not liable to be registered.
12. In the view which we have taken on this point, it is perhaps needless to examine the other question, which has bet n raised before us, namely, that the sale of timber in this case is not a sale of goods. It would be useful, however, to indicate the point which has been urged before us. It has been argued that the word 'goods', excluding irrelevant matters, means all kinds of movable property. The term 'movable property' has not been defined in the Act itself, but the learned counsel for the petitioner relies, for a definition of this term, on the Assam General Clauses Act, 1915 (Act II of 1915), where 'immovable property' has been defined under section 2 (30), as including land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth. The learned counsel for the petitioner submits that since the sal trees are attached to the earth, the sale of these tress would be sale of immovable property, and not of movable property, as contemplated by the definition of 'goods' in the Sales Tax Act. Mr. Lahiri for the respondents relies, on the contrary, upon the definition of 'immovable property' given under section 3 of the Transfer of Property Act, where 'standing timber' is not included. It is contended that the intention in selling these trees was that they should be severed from the land and utilised as timber, and not that the trees were to remain standing on the land for yielding fruits or for any other purpose. It is, therefore, contended that the sale in this case was sale of 'movable property', and would be covered by the definition given in the Sales Tax Act. It is unnecessary for us to decide this question at present in the view which we have already taken of the petitioner's contention on the first point before us, namely, that he was not a 'dealer'.
13. The application must, therefore, succeed, and the order of the Commissioner of Taxes, Assam, has to be set aside and the Rule made absolute. The respondents are, therefore, directed not to take any action against the petitioner on the assumption that he is a 'dealer' in respect of these transactions.
14. The petitioner is entitled to his costs: hearing fee Rs. 100.
Deka, J.
15. I agree.