,~-· STATE OF MAHARASHTRA & ANR. v. CHAMPALAL KISHANLAL MORTA March 17, 1970 (J. C. SHAH AND K. S. HEGDE, JJ.J Bombay Sales Tax Act (51 of 1959) as amended by the Maharashtra Act (15 of 1967), s. 2(7)-"Goods",, including standing timber agreed Ito be severed-Sale of standing trees agreed to be severed under contract -If 'sale of goods' liable to sales tax.
The contract of sale entered into by the respondent expressly pro- vi,ded that the timber agreed to be sold shall be severed. The High Court held th:.it 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 \Vas confirmed by this Court on appeal. But after the judgment of th·o 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. (47 CJ
c A State Legislature may not extend tbe import cif 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 at under the cortract of 1ale. The timber in the present case was therefore "goods" within the meaning of s. 2(7) of the Sale oi Goods Act. Since the expression "sale of goods" in Entry 54, List JI, of the Constitution has the same meaning as that expression has ~n the Sale of Goods Act, the amendment is valid. (47 H; 48 A-El The State of Madras v. Gannon Dunkerley. [1959] S.C.R. 379 and Pandit Banarsi Das Bhanot v. The State of Madhya Pradesh, [1959] S.C.R. 427, referred to.
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 judg- ment and 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 respO)lident.
MAHARASHTRA v. CHAMPALAL (Shah, J.) Th~. Judgment of the Court was delivered by s c Shah, J. Appeal No. 1878 of 1967 was ordered to be dis- missed by this Court on July 17, 1969. The Court held that the ~ale 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 amend- ed by the Maharashtra Act 15 of 1967 with retrospective opera- tion, 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 a:n error apparent on the face of the record, we have granted review of judgi:p.ent. The expression "goods" was defined ins. 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 :
"Ia section 2 of the Bombay Sales Tax Act, 1959 . . . in clause (13), after the words 'and commodi- ties' the following shall be, and shall be deemed always to have been, added, namely :-
'and all standing timber which is agreed to be sever- ed before sale or under the contract of sale'." Tb.e 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 II 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. Gan- non Dunkerley & Co. (Madras) Ltd.(1) observed that the expres- sion "sale of goods" was, at the time when the Government of India l\ct, 1935, was enacted, a term of well-recognised legal im- port in the general law relating to sale of goods and in the legis- lative practice relating to that. topic and must be interpreted in Entry 48 in List II in Sch. VII of the Act as having the same mean- ing 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. 42f SUPlU!Ml! COUlT REPORTS ~; '~ [1971 J 1 $.C.R. "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 defini- tion 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 con- tract 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 eiqiression "sale of goods" in the Con- stitution in Entry 54 List If having the same meaning as that ex- pression has in the Sale of Gooa!r Act, sale of timber agreed to be severed under the terms of the contract may be regarded as sale of goodo.
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 alter the judgment of the High Court, there will be no order as to costs throughout.
V.P.S. ;1peal allowed. c