Input:
Appeal No. 210 of 1959.
Appeal by special leave from the judgment and order dated January 16, 1958, of the Patna High Court in Mis.
Judicial case No. 156 of 1957.
B. C. Ghose and P. K. Chatterjee, for the Appellant.
section P. Varma, for Respondents Nos. 1 to 5.
R. C. Dutta, for Respondents Nos.
6 to 20. 1960.
November 7.
The Judgment of Hidayatullah, Das Gupta and Ayyangar, JJ., was delivered by Ayyangar, J., and that of section K. Das and Shah, JJ., was delivered by Shah, J. AYYANGAR.
The sole question which arises in this appeal, which comes by way of special leave is as to whether sales under which goods were delivered outside the State of Bihar for the purpose of consumption but not within the State of first delivery or first destination, are exempt from the levy of sales tax by the Bihar State by virtue of article 286(1)(a) of the Constitution as it stood before the recent amendment.
The India Copper Corporation Ltd. (referred to hereafter as the assessee company) carries on business in copper and various other materials and mineral pro.
ducts and the office of its General Manager is in the district of Singhbhum in Bihar.
The period covered by the assessment now in dispute is January 26, 1950 to March 31, 1950.
The normal practice of the assessee company was to deposit sums of money from time to time provisionally towards payment of sales tax in advance and have the amount finally adjusted after the completion of the assessment of each year.
The assessee company followed this practice in respect of the amount of sales tax due by it for the year 1949 50.
For the financial year April 1, 1949 to March 31, 1950, the Superintendent of Sales tax, Singhbhum, 278 computed the tax liability of the company in the sum of Rs. 3,60,703 4 0 by an order of assessment dated November 13,1950, and the company made payment of the amount due by it beyond the sums already paid.
It would be noticed that this financial year comprised two periods (1) before the Constitution, viz., April 1, 1949 to January 25, 1950, and (2) the post Constitution period from January 26, 1950 to March 31, 1950.
There is now no controversy as regards the sales tax payable in respect of sales effected during the pre Constitution period.
The assessee company however raised a dispute that in respect of the post Constitution period, it was not liable to pay any sales tax in respect of sales to buyers, under which though the property in the goods passed within the State, delivery of the goods was effected outside the State of Bihar for consumption outside that State on the ground that such sales were exempted from tax by article 286(1)(a) of the Constitution as it originally stood.
It addressed a formal letter to the Commissioner of Commercial Taxes, Bihar, on December 30, 1952, making this demand enclosing a statement showing full particulars of the goods sold, the bill numbers, the date and the amount etc., to enable the refund claimed to be calculated.
The assessee company followed it up by a formal petition for review of the assessment order by filing a revised return under section 12(2) of the Bihar Sales tax Act together with an application for refund.
The departmental authorities rejected these applications by order dated July 20, 1953.
Further proceedings before the department by way of revision etc.
failed to secure to the assessee company the relief which it claimed and thereafter it filed an application under articles 226 and 227 of the Constitution before the High Court of Patna praying for the issue of a writ to quash the order of assessment dated November 30, 1950, and the orders rejecting the prayers for review, reassessment and refund and for a direction to the departmental authorities to refund the sum realised by them in so far as the tax related to sales as a result of which goods were delivered outside the State of Bihar.
279 The learned Judges of the High Court held that the order of the Superintendent of Sales tax, Singhbhum, dated November 13, 1950, should be set aside and that the matter should go back to the Superintendent to make a reassessment according to law for the post Constitution period.
A further direction was added requiring the respondent to refund to the assessee so much of the tax as had been paid in excess of the amount of reassessment to be made by the Superinten dent in accordance with the law as laid down by the Court.
In formulating the law applicable, the learned Judges drew a distinction between sales as a direct result of which goods were delivered in a State outside the State of Bihar and consumed in that State and those cases in which the goods thus delivered, were not consumed in the State of first destination but were re exported from the State of first destination to other States.
They held that the first category of sales were covered by the Explanation to article 286 (1)(a) of the Constitution and were " inside " the State of first delivery and consequently " outside " the State of Bihar within the meaning of the Article and therefore exempt from tax by the Bihar State.
In regard, however, to the second category of sales, it was held that they were not within the Explanation and were therefore outside the constitutional exemption under article 286(1)(a).
The assessee company not being satisfied, filed an application to the High Court for a Certificate of fitness under articles 132 and 133 of the Constitution, but this having been rejected, they applied to and obtained special leave from this Court under article 136 of the Constitution and that is how the appeal is now before us.
Three points were urged before us by Mr. B. C. Ghose, learned Counsel for the appellants: (1) that on a proper construction of article 286(1)(a) and the Explanation thereto (as it stood before the Article was amended by the Constitution Sixth Amendment Act, 1956) every sale as a direct result of which goods were delivered for consumption outside the State, was not within the taxing power of the State in which the 280 goods were at the time of the sale, and ,in which property passed as a result thereof, and that it was immaterial whether the delivery was for the purpose of consumption in the State of first destination or whether the delivery in such State was not for the purpose of consumption therein but, for re export to other States, (2) that even if article 286(1)(a) exempted only sales in which as a direct result of the sale the goods were delivered for the purpose of consumption in the State of first destination, on the pleadings and the evidence before the Court the assessee company must be taken to have established that all the sales effected by it and in regard to which exemption from payment of tax was claimed, conformed to this requirement, (3) a narrower submission, that even it be that to fall within the Explanation the delivery has to be for the Purpose of consumption in the State of first destination, the learned Judges of the High Court erred in requiring the assessee company to prove not merely that the goods were delivered for the purpose of consumption but further that the goods so delivered were actually consumed within that State.
We shall now deal with these points in that order.
Article 286(1)(a) together with the Explanation on whose construction the first point depends ran in these terms: " Article 286(1).
No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place (a) outside the State; or (b). . . . . . . . . . . Explanation.
For the purposes of sub clause (a) a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State.
" The scope and the purpose of this Explanation was 281 discussed and explained by this Court in The State of Bombay vs Unitea Motors (India) Ltd. (1) and it is the passage in this judgment extracted below on which reliance was placed by the learned Counsel in support of his submission: ". . .
The authors of the Constitution had to devise a formula of restrictions to be imposed on the State power of taxing sales or purchases involving inter State elements which would avoid the doubts and difficulties arising out of the imposition of sales tax on the same transaction by several Provincial Legislatures in the country before the commencement of the Constitution.
This they did by enacting clause (1) (a) with the Explanation and clause (2) of Article 286.
Clause (1)(a) prohibits the taxation of all sales or purchases which take place outside the State but a localised sale is a troublesome concept, for, a sale is a composite transaction involving as it does several elements such as agreement to sell, transfer of ownership, payment of the price, delivery of the goods and so forth, which may take place at different places.
To solve the difficulty an easily applicable test for determining what is an outside sale had to be formulated, and that is what, in our opinion, the Explanation was intended to do.
It provides by means of a legal fiction that the State in which the goods sold or purchased are actually delivered for consumption therein is the State in which the sale or purchase is to be considered to have taken place, notwithstanding the property in such goods passed in another State .
An " outside " sale or purchase is explained by defining what is an inside sale, and why actual delivery and consumption in the State are made the determining factors in locating a sale or purchase will presently appear.
The test of sufficient territorial nexus was thus replaced by a simpler and more easily workable test: Are the goods actually delivered in the taxing State, as a direct result of a sale or purchase, for the purpose of consumption therein ? Then, such sale or purchase shall be deemed to have taken place (1) ; , 1081 36 282 in that State and outside all other States.
The latter States are prohibited from taxing the sale or purchase; the former alone is left free to do go.
Multiple taxation of the same transaction by different States is also thus avoided.
" It might be mentioned that this portion of the judgment is unaffected by the dissent expressed in the later decision in The Bengal Immunity Company Ltd. vs The State of Bihar (1).
The argument based upon this passage was broadly on these lines: Article 286 (1)(a) imposes a ban on the legislative power to levy a tax on sales which are outside " the taxing State.
What sales are " outside is not easy to decide because that depends upon " the situs " of a sale, which cannot, in most cases, be located in any one place with certainty being dependent on a variety of factors which might or might not converge.
The Constitution makers did not directly define what was meant by a ,sale that was " outside the State " but achieved the same purpose by explaining an " inside " sale with the result that what was not an " inside " sale should be held to bean ,outside" sale.
It must however be pointed out that it was not disputed that the terms of the " Explanation " would not be satisfied unless the delivery was for the purpose of consumption therein, i.e. in the State of first destination, If the terms of the Explanation were satisfied, the State of " delivery.
cum consumption ", (to coin a convenient expression to designate the State in which goods are delivered as a direct result of the sale for the purpose of consumption therein), used in the Explanation, would have power to tax the sale as being one fictionally " inside " it.
In such an event all the other States in India, barring that State would be prevented from taxing that sale because the sale would be " outside " those States.
This however, it was urged, would not exhaust the operation of the Explanation, but further that the Explanation was exhaustive of what the Constitution makers conceived to be a sale which alone may be the subject of tax by a State.
The deduction learned Counsel made from these premises was twofold (1) that (1) 283 in cases where goods were as a direct result of the sale delivered outside the State of Bihar for the purpose of consumption in the State of first destination, the conditions of the Explanation were satisfied and the sales being " outside " the State of Bihar could not be taxed by that State.
So far there is no dispute and indeed the learned Judges of the High Court have, subject to a matter of detail to which reference will be made later, accepted the contention of the assessee.
(2) a further consequence, that in cases where goods were delivered as a result of the sale outside the State of Bihar, but not for the purpose of consumption in such State of first destination, the terms of the Explanation were no doubt not satisfied and consequently the, sale was not inside such State of delivery and indeed not " inside " any State in India within the Explanation, but that such sales also must be held to be " outside " every State in India within article 286 (1)(a).
The learned Judges of the High Court repelled this contention and, in our opinion, correctly.
The passage in the judgment of the United Motors case extracted earlier dealt with Explanation sales and with none else.
When the terms of the Explanation were satisfied such sales were by a fiction deemed to be " inside " the State of delivery cum consumption and therefore " outside " all other States.
In such cases therefore, only the State " inside " which the sale is deemed to take place by virtue of the Explanation, is exempt from the ban imposed by article 286(1)(a).
All other States would be subject to that ban in respect of such sales.
The learned Chief Justice however did not, in the passage extracted, deal with the case of sales which did not satisfy the terms of the Explanation.
The situs of what might be termed 1 non Explanation ' sales has therefore to be determined independently of the terms of the Explanation.
Such sales would be exempt from tax only if the sale took place " outside the State but not otherwise.
The next question is, does a sale take place " outside " the State, where as a result of the contract of 284 sale, the property in the goods passes to the purchaser within the State; in other words, is a sale completed by the passing of property within the State not " inside" a State, for the more reason that as a direct result of the sale the goods are delivered outside the State.
The answer depends on the meaning to be attributed to the words " a sale or purchase which has taken place " outside the State occurring in the body of article 286 (1).
The expression " outside the State " is capable of being understood in more senses than one.
It could be understood as comprehending cases where no element or ingredient which constitutes a sale takes place within the State; in other words as applying solely to those cases where there exists no territorial nexus between the State imposing the tax and the sale.
Obviously, this could not have been intended to be incorporated in article 286(1) because the tax in such cases would be beyond the legislative power of the State under Entry 54 of the State List read with article 246 of the Constitution.
The expression " outside " has therefore to be understood not as a sale so " outside " as not to have any territorial connection between the State in question and the sale, but in a somewhat narrower sense.
The real difficulty arises in ascertaining the precise content of the narrower sense in which the word is used as meaning a sale in substance " outside " the State, though there might be some elements of the sale which if the exemption under article 286(1)(a) were not enacted, would enable a State to levy a tax on the sale on the ground that it was within the legislative power of the State under article 246 read with Entry 54.
As already pointed out, the situs of a sale is not easy to determine and several factors which constitute a completed transaction of sale including the delivery of the goods, lay claim to be considered as in themselves constituting sufficient next to justify their being treated as determining the locus of a sale.
Thus, merely by way of illustration, the place where the goods are at the time of the contract of sale, the place where the contract of sale is concluded, the place where the property in the goods passes and that 285 in which the delivery takes place compete for recognition as constituting the locus of a sale.
Before the Constitution, these and other similar factors were treated as affording sufficient territorial connection to endow the State in which any of the events occurred with legislative competence to tax the sale.
This led to a multiplicity of the taxation of the same transaction of sale by a plurality of States, with the result that the consumer was hard hit and trade itself, and national economy suffered in the process.
It has been pointed out that article 286(1)(a) was designed to counteract that state of affairs.
If a single State was designed to have the power to tax any particular transaction of sale, the question that next falls to be considered is the determination of that State in regard to which it could be predicated that the sale in question was not " outside " that State or in other words, the determination of the particular State in regard to which it could be said that the sale was " inside " that State.
The key to the problem is afforded by two indications in the Article itself: (1) the opening words of Article 286(1) which speak of a sale or purchase taking place and (2) the non obstante clause in the Explanation which refers to the general law relating to " sale of goods under which property in the goods has, by reason of such sale or purchase, passed in another State.
" These two together indicate that it is the passing of property within the State that is intended to be fastened on, for the purpose of determining, whether the sale in question is " inside " or " outside " the State, and therefore, subject to the operation of the " Explanation " that State in which property passes would be the only State which would have the power to levy a tax on the sale.
As was explained in the recent decision of this Court in Burmah Shell Oil Storage & Distributing Co., of India, Ltd. vs The Commercial Tax Officer (1) : " By sale here (article 286(1)(a) ) is meant a completed transaction by which property in the goods passes.
Before the property in the goods passes, the contract (1) C.A. 751 of 1957 & C.A. 10 of 1958 (Unreported).
286 of sale is only executory, and the buyer has only a chose in action. . . .
The Constitution thinks in terms of a completed sale by the passing of property and not in terms of an executory contract for the sale of goods.
" Notwithstanding that is not an " outside " sale, the power of the State to tax might be negatived by the operation of the Explanation which by its non obstante clause shifts the situs of the sale and renders the sale transaction one within the delivery cum consumption State, i.e. as the State in which the sale transaction must be deemed to take place.
Where the terms of the Explanation are satisfied, the sale transaction will, by a legal fiction created by it, be deemed to take place "inside" the State of delivery and therefore " outside " the State in which the property passes.
The conclusion reached therefore is that where the property in the goods passes within a State as a direct result of the sale, the sale transaction is not outside the State for the purpose of article 286(1)(a), unless the Explanation operates.
We need also add that the power of the State to impose the tax might still not be available unless the transaction in question is unaffected by the other bans imposed under sub cl.
(1)(b), (2) and (3) of article 286.
The submission therefore of learned Counsel for the appellants, that in respect of non Explanation sales the State of Bihar has no power to levy a tax by reason of such sales being 'outside " the State within article 286(1)(a) must be rejected.
The second contention urged by the learned Counsel for the appellant was that even assuming he was wrong on the first point, all the sales by the assessee company fell within the terms of the Explanation to article 286(1)(a) being sales as a direct result of which the goods were delivered for consumption in the State of first destination, and that the learned Judges of the High Court were in error in considering, that some of the sales did not conform to this requirement.
In support of this submission learned counsel drew our attention to two matters.
He first referred us to the application dated December 30, 1952 made on behalf 287 of the assessee company to the Commissioner of Commercial Taxes, Bihar, Patna in which the claim for refund of the tax paid was rested on the following ground : After getting out that the tax on sales effected between the period January 26, 1950 to March 31, 1950 was not assessable by virtue of article 286 of the Constitution, the application stated: " Total sales of raw materials of copper and brass sheet and circles sold by us and despatched under railway receipts for buyers ' consumption are as follows".
Then followed the sales effected and the tax paid in respect of the sales.
The claim in this form was annexed to and made part of the petition to the High Court under article 226 and 227 of the Constitution and in paragraph 9 of the petition, this letter was referred to and a copy thereof was incorporated and marked as 1A.
In this paragraph which was the other matter relied on the claim for refund was said to be " on sales made to buyers outside Bihar State for consumption ".
Learned Counsel strongly pressed upon us that paragraph 9 and the annexure had clearly asserted that the sales which were the, subject of the claim for refund involved a delivery of the goods outside the State of Bihar for consumption in the State of first destination and the State of Bihar not having filed any counter affidavit challenging the correctness of these allegations, the High Court should have held that the terms of the Explanation were satisfied and should have ordered the refund claimed.
We however consider that this submission is without force.
Neither in the claim put forward in Exh. 'A ' nor in para graph 9 of the petition was any distinction drawn between sales under which deliveries were effected outside the State of Bihar for the purpose of consumption in the State of first destination and those in which the deliveries outside the State were effected for the purpose of consumption not in the State of first destination but in other States.
In fact, this was made clear in the later paragraphs of the petition to the High Court from which it is apparent that the assessee company made a claim for tax exemption in 288 respect of sales in which the delivery took place outside the State of Bihar, whether the delivery was for the purpose of consumption in the State of first destination or otherwise.
In paragraph 17(1) of the petition to the High Court the assessee stated: " (the petitioner was not liable to pay tax on goods delivered outside the State of Bihar which was also for consumption outside the State of Bihar ", and again in clause (iii) of the same paragraph this was repeated: " the goods being outside the State of Bihar, delivered outside the State of Bihar and consumed outside the State of Bihar were not liable to sales tax by the State of Bihar " and similarly in cl.
(v) of the same paragraph a reference was made to " goods delivered outside the State of Bihar for consumption outside the State of Bihar ".
The same idea is emphasized in paragraph 19 also which contained the prayer of the petition.
On these averments it is clear that the claim made by the assessee was that to invoke the exemption contained in article 286(1)(a) it was sufficient that the goods were delivered outside the State of Bihar and that it was immaterial whether the delivery was for the purpose of consumption in the State of first destination or otherwise.
This involved the same argument which was raised by the learned Counsel that we have dealt with earlier.
The learned Judges of the High Court were therefore right in drawing a distinction between the two types of sales which we have already indicated.
The last point that was urged by the learned Counsel was that the learned Judges of the High Court erred in requiring the assessee to prove that the goods delivered outside the State of Bihar were actually consumed in the State of first destination before the exemption from tax could be availed of In their judgment now under appeal the learned Judges have stated: "The petitioner would not be entitled to exemption if the goods were not consumed in the State of first destination but were re exported from the State of first destination to other States) '.
Learned Counsel for the appellant complained that 289 under the Explanation to article 286(1)(a) there need be no proof of actual consumption of the goods delivered in the State of first destination but that the Explanation was satisfied if the purpose of the delivery tinder the sale was for consumption in that State.
If after a sale that satisfied that requirement, viz., for the purpose of consumption in the State of first destination, the buyer under such a sale for his own purposes reexported the goods that was not a matter with which the seller was concerned and would not affect the character of the sale as one falling within the Explanation to article 286(1)(a).
Learned Counsel therefore urged that the learned Judges of the High Court went wrong in requiring proof on the part of the assessee that the goods were actually consumed within the State of first delivery outside Bihar and that this was an unwarranted addition to the requirements of the Explanation.
We consider this submission well founded and indeed the learned Counsel for the respondent did not dispute that the actual order of the High Court went beyond the terms of the Explanation to article 286(1)(a).
The order of the High Court will, therefore, be modified by making it clear that if the goods were as a direct result of the sale delivered outside the State of Bihar for the purpose of consumption in the State of first delivery the assessee would be entitled to exemption of the sales tax imposed and that it would not be necessary for the assessee to prove further that the goods so delivered were actually consumed in the State of first destination.
Subject to this modification, the appeal fails, but in the circumstances of the case there will be no order as to costs.
SHAH J.
We agree with the conclusion of Mr. Justice Rajagopala Ayyangar, J., but because our approach to the question is somewhat different, we propose to record our reasons separately.
The Bihar Sales Tax Act, 1947, was enacted in exercise of legislative authority conferred upon the Provincial Legislatures by entry 42 in List II read 37 290 with section 100(3) of the Government of India Act, 1935.
By section 2(g) of the Act, " sale " was defined (in so far as it is material) as meaning any " transfer of property in goods for cash or deferred payment or other valuable consideration. . provided. . provided further that notwithstanding anything to the contrary in the Indian Sales of Goods Act, 1930, the sale of any goods (i) which are actually in Bihar at the time when, in respect thereof, the contract of sale as defined in section 4 of that Act is made, or (ii) which are produced or manufactured in Bihar by the producer or manufacturer thereof, shall, wherever the delivery or contract of sale is made, be deemed for the purposes of this Act to have taken place in Bihar." Under entry 42 of List II of the Government of India Act, 1935, the Provincial Legislatures could tax sales by selecting some fact or circumstance which provided a territorial nexus with the taxing power of the State even if the property in the goods sold passed outside the Province or the delivery under the contract of sale took place outside the Province.
Legislation taxing sales depending solely upon the existence of a nexus, such as production or manufacture of the goods, or presence of the goods in the Province at the date of the contract of sale, between the sale and the Legislating Province could competently be enacted under the Government of India Act, 1935 see the Tata Iron and Steel Co., Ltd. vs The State of Bihar and Poppatlal Shah vs The State of Madras (2).
By article 286 of the Constitution, certain fetters were placed upon the legislative powers of the States as follows: article 286: " (1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place (a) outside the State ; or (b) in the course of the import of the goods into, or export of the goods out of, the territory of India.
(1) (2) ; 291 Explanation:For the purposes of sub cl.
(a) a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State notwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State.
(2) Except in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter State trade or commerce : Provided that the President may by order direct that any tax on the sale or purchase of goods which was being lawfully levied by the Government of any State immediately before the commencement of this Constitution shall, notwithstanding that the imposition of such tax is contrary to the provisions of this clause, continue to be levied until the thirty first day of March, 1951.
(3) No law made by the Legislature of a State imposing, or authorising the imposition of, a tax on the sale or purchase of any such goods as have been declared by Parliament by law to be essential for the life of the community shall have effect unless it has been reserved for the consideration of the President and has received his assent.
" With a view to impose restrictions on the taxing power of the States under the pre Constitution statutes, amendments were made in these statutes by the Adaptation of Laws Order.
By the Adaptation of Laws Order, 1951, in the Bihar Sales Tax Act was incorporated with retrospective operation from January 26, 1950, section 33, which provided: " ' (1) Notwithstanding anything contained in this Act, (a) a tax on the sale or purchase of goods shall not be imposed under this Act (i) where such sale or purchase takes place outside the State of Bihar ; or 292 (ii) where such sale or purchase takes place in the course of import of the goods into, or export of the goods out of, the territory of India ; (b) a tax on the sale or purchase of any goods shall not, after the 31st day of March, 1951, be imposed where such sale or purchase takes place in the course of inter State trade or commerce except in so far as Parliament may by law otherwise provide; (2) The Explanation to cl.
(1) of article 286 of the Constitution shall apply for the interpretation of sub cl.
(1) of cl.
(a) of sub section
" By this amendment, on the taxing power of the Bihar State the same restrictions were engrafted on the pre Constitution statute as were imposed by article 286 of the Constitution upon post Constitution statutes.
This court has held in the Bengal Immunity Co., Ltd. vs The State of Bihar (1) that the operative provisions of the several parts of article 286 namely cl.
(1) (a), (1)(b) and (2) and cl.
(3) were intended to deal with different topics and one could not be projected or read into another.
Therefore, by the incorporation of section 33 in the Bihar Sales Tax Act read with article 286, notwithstanding the amplitude of the power otherwise granted by the charging section read with the definition of " sale ", a cumulative fetter of triple dimension was imposed upon the taxing power of the State.
The Legislature of the Bihar State could not since January 26, 1950, levy a tax on sale of goods taking place outside the State or in the course of import of the goods into, or export of the goods out of the territory of India, or on sale of any goods where such sale took place in the course of inter State trade or commerce.
By the Explanation to article 286(1)(a) which is incorporated by sub section
(2) section 33 of the Bihar Sales Tax Act, a sale is deemed to take place in the State in which the goods are actually delivered as a direct result of such sale for the purpose of consumption in that State even though under the law relating to sale of goods the property in the goods has by reason of such sale passed in another State.
In the State of Bombay vs The United Motors (India) Ltd. (2), it was held that (1) (2) ; 293 since the enactment of article 286(1)(a), a sale described in the Explanation which may for convenience be called an " Explanation sale " is taxable by that State alone in which the goods sold are actually delivered as a direct result of sale for the purpose of consumption in that State.
The right to tax arises because the sale is deemed to take place in that State and outside all other States and the latter States are prohibited from taxing the sale ; the former alone is left free to do so.
The Bihar Sales Tax Act enacted in exercise of the power conferred by entry 42 of List II of the Government of India Act, 1935, upon the Provincial Legislatures is saved by article 372 of the Constitution as existing law, but by the combined operation of sub sections
(1) and (2) of section 33, the Bihar State is incompetent to tax sales of goods in the course of imports into and exports out of the territory of India, and after March 31, 1951, sales of goods in the course of inter State trade or commerce.
In view of the exposition of the content of the Explanation to article 286(1)(a) by this court in the United Motors case (1), the Bihar State is also incompetent to tax " Explanation sales " where the goods are delivered in another State as a direct result of the sale for consumption in that State.
By this last ban, to the extent provided by subs.
(1)(a)(i) and sub section
(2) of section 33, the State of Bihar is deprived of its power to tax sales; but the ban does not wholly extinguish the power of the State to tax sales relying upon a real territorial nexus between the sale and the State.
In other words, by enacting that a tax shall not be imposed under the Act when the sale takes place outside the State of Bihar in section 33(1)(a)(i), only the power to tax " Explanation sales " which do not take place within the State of Bihar in taken away, but not the power to tax " non Explanation sales " in which though under the general law of sale of goods the property passes outside the State, there exists between the taxing power of the State and the sale a nexus as contemplated by the definition of sale in section 2(g).
If the sale is one in which the goods have been delivered outside the State of (1) ; 294 Bihar, but not as a direct result of the sale or not for the purpose of consumption in the State of first delivery, the sale will not be covered by the Explanation, and the right to tax the sale, if arising otherwise under the Act relying upon the territorial nexus, will not be impaired by the prohibition imposed by cl.
(1)(a)(i) of section 33.
The right of the State of Bihar to tax a sale relying upon a real territorial nexus not being impaired by section 33 of the Act, all sales as defined by section 2(g) of the Bihar Sales Tax Act are liable to be taxed, except those falling within section 33(1)(a)(ii), section 33(2) and " Explanation sales " outside the State of Bihar.
The appellant company carries on the business of manufacturing copper and other mineral products in the State of Bihar.
It has its registered office and its place of business in the District of Singhbhum in the State of Bihar and is registered as a " dealer " under the Bihar Sales Tax Act, 1947.
The appellant company sent out its products to various places in India in the year of assessment ending on March 31, 1950 and has paid the tax assessed by the Sales Tax Officer.
The appellant is now seeking to obtain a refund of the tax paid for the period between January 26 and March 31, 1950, on the plea that the tax was paid under a misapprehension of the law.
The High Court in an application under article 226 of ' the Constitution directed the Sales Tax authorities to refund so much of the tax as was not proved to have been paid in respect of sales of goods delivered and consumed in the State of first destination.
On the goods delivered and consumed in the State of first destination outside Bihar, the appellant could not be called upon to pay sales tax.
That is undisputed.
The appellant also claimed that on the goods delivered for consumption in the State of first delivery outside Bihar, it was not liable to pay sales tax, even if there was no evidence to prove that the goods were in fact consumed in such State.
In our judgment, the High Court was in error in directing that the exemption provided by article 286(1)(a) read with the Explanation which was at the material time incorporated by section 33 in the Bihar Sales Tax Act by the Adaptation of 295 Laws Order, 1951, only applied to all sales of goods delivered and consumed in the State of first destination.
If the goods were delivered for consumption, it is immaterial whether they were in fact consumed in the State where they were delivered.
The power of the State to levy sales tax relying upon the territorial nexus between the taxing power of the State and the sale, is impaired for reasons already set out to the extent to which it is restricted by the incorporation of article 286(1)(a)(i) and the Explanation thereto, in that Act.
Therefore, sales effected on or after January 26, 1950, where goods are as a direct result of the sale delivered in another State for consumption in that other State, are not liable to be taxed.
The directions issued by the High Court will therefore be modified as follows: The order of the Superintendent of Taxes is set aside.
He is directed to grant refund of tax paid in the light of this judgment.
The appellant will be entitled to exemption from payment of tax if the goods are, as a direct result of the sale, delivered in another State for the purpose of consumption in that State.
Appeal dismissed subject to modification.

Output:
The appellant effected sales during the period 26 1 1950 to 31 3 1950, whereunder the property in the goods passed in the State of Bihar but delivery was effected outside Bihar for consumption outside Bihar.
In some of these sales the goods were delivered in the State of first destination for consumption therein whilst in other cases the goods were not for consumption in the State of first delivery of destination.
The appellant contended that both these categories of sale were exempt from tax under article 286(1)(a) as they were outside sales.
Held (per Hidayatullah, Das Gupta and Rajagopala Ayyangar, JJ.) that the sales where delivery in the State of first destination was for consumption therein, were outside the State of Bihar within the Explanation to article 286(1)(a) and Bihar could not tax them, but the sales where delivery in the State of first destination was not for consumption therein were not " Explanation Sales " and were not " outside " sales and Bihar could tax them.
Where the property in the goods passed within the State as a direct result of the sale the sale was not an " outside " sale for the purpose of article 286(1)(a) unless it fell within the Explanation.
In the first category of sales the appellant was entitled to the.
exemption and it was not necessary for it to prove that the goods delivered for consumption in the State of first destination were actually consumed therein.
The State of Bombay vs United Motors (India) Ltd., and Bengal Immunity Company Ltd. vs The State of Bihar, , referred to.
Burmah Shell Oil Storage & Distributing Co. of India Ltd. vs The Commercial Tax Officer, C. A. No. 751 of 57 and C. A. No. 10 of 1958 (Unreported), relied on.
Per section K. Das and Shah, Jj.
Section 33 introduced in the Bihar Sales Tax Act by the Adaptation of Laws Order, 1951, engrafted the same restrictions on the taxing power of the State on the pre Constitution statutes as were imposed by article 286 upon post Constitution statutes.
Section 33(1)(a)(1) of the Act took away only the power to tax " Explanation Sales " but not the power to tax " non Explanation Sales ".
A sale in which goods had been delivered outside Bihar, but not as a direct result of 277 the sale or not for the purpose of consumption in the State of first delivery was not covered by the Explanation, and the right to tax the sale, if it arose otherwise under the Act, was not impaired by section 33(1)(a)(i).


Input:
ivil Appeal No.309 of 1955.
Appeal from the judgment and order dated October 7, 1953, of the Orissa High Court in O.J.C. No. 37 of 1952.
C.K.Daphtary, Solicitor General of India and B.Sen (B. M. Patnik, Advocate, Orissa High Court with Special Permission of the Court and R. H. Dhebar), for the appellants, Nos. 1, 3 to 9 and 11 to 16 and the intervener.
H. Mahapatra and Gyan Chand Mathur, for the respondent.
December 6.
The following Judgment of the Court was delivered by BHAGWATI J.
This appeal with a certificate under articles 132 and 133(1)(c) of the Constitution arises out of a writ petition filed by the respondent in the High Court of Orissa under article 226 seeking to quash the proceedings taken by certain tenants of his private lands under the provisions of the Orissa Tenants ' Protection Act, 1948 (Orissa III of 1948), hereinafter referred to as the 1948 Act.
The respondent was the ruler of the erstwhile Khandapara State which merged with the Province of Orissa under the States ' Merger (Governor 's Provinces) Order, 1949 with effect from August 1, 1949.
The respondent had on December 14, 1947 entered into an agreement with the Governor General of India art, 3 Whereof provided that: 1069 " The Raja shall be entitled to full ownership, use, and enjoyment of all private properties (as distinct from State Properties) belonging to him on the date of the agreement.
" That article further provided that if any dispute arose as to whether any item of property was the private property of the Raja or State property, it shall be referred to such officer with judicial experience as the Dominion Government might nominate and the decision of that officer shall be final and binding on both parties.
The respondent claimed a number of properties and the matter was referred to the Adviser for Orissa States for determining whether all the items claimed by him could be regarded as his private pro perties.
On June 10, 1949, the Adviser communicated his decision that the respondent was entitled to 1,643 acres as his Khamar lands and 29 and odd acres as lands settled with his tenants.
The lands comprised in the present proceedings taken under the 1948 Act as aforesaid were declared to be the private properties of the respondent.
On March 3, 1950, the Orissa Legislature passed the Orissa Merged States ' (Laws) Act, 1950 (Orissa IV of 1950) hereinafter referred to as " the 1950 Act ".
Section 4 of that Act extended inter alia the 1948 Act to the areas merged in the absorbing Province of Orissa.
Section 7 provided for the modification of tenancy laws in force in the merged States.
The relevant provisions of that section so far as they are material for the purposes of this appeal may be set out herein: " Notwithstanding anything contained in the tenancy laws of the merged States as continued in force by virtue of article 4 of the States Merger (Governor 's Provinces) Order, 1949: (a)all suits and.
proceedings between landlord and tenant as such shall be instituted and tried in revenue courts.
Explanation:In this clause the expression " landlord" shall mean a person immediately under whom a tenant holds land, and the expression " tenant " shall mean a person who holds land under another 1070 person and is or, but for a special contract, would be liable to pay rent for that land to that person: (h) when a person holds Khamar, nij jote or any other private lands of a Ruler, which has been recognised as such by the Provincial Government, he shall not be liable to ejectment but shall be liable to pay such fair and equitable rent as may be fixed by any competent authority appointed in this behalf by the Revenue Commissioner or the Commissioner, Northern Division, as the case may be and thereupon he shall acquire right of occupancy in respect of such lands: " On April 14, 1951, the State Legislature passed the Orissa Tenants Protection (Amendment) Act, 1951 (Orissa XVII of 1951) whereby the date the " 1st day of September, 1947 " wherever it was used in the 1950 Act, was substituted by the "I st day of August, 1949" for the purposes of the merged States areas and it was further provided that in such areas where neither the Madras Estates Land Act, 1908, nor the Orissa Tenancy Act, 1913 was in force the special laws or customs prevailing therein shall be taken into consideration for the application of that Act.
It appears that certain tenants who were in occupation of the private lands of the respondent were evicted by him during the year 1951 and other tenants were inducted by him and put in possession of the lands.
The tenants who were thus evicted applied to the Revenue Officer some time in 1952 for being restored to possession of their tenancy lands under the provisions of the 1948 Act, alleging that the respondent was their landlord and that he had unlawfully evicted them from their lands.
These were numbered as O.T.P. Act Cases Nos.
21 to 25 of 1952, 26 to 28 of 1952, 29 to 32 of 1952 and 33 to 41 of 1952.
Notice was issued to the respondent but it appears that be did not care to enter appearance before the Revenue Officer or to contest the applications.
On the ex parte evidence of the Applicants the Revenue Officer directed restoration of possession to them holding that they 1071 were in possession of the lands as tenants on the 1st day of August, 1949, and as such were entitled to the benefits conferred by the 1948 Act, as amended in its application to the merged States.
The respondent thereupon filed a writ petition under article 226 of the Constitution in the High Court seeking to quash the entire proceedings on the ground that in respect of the disputed lands he was not a " landlord " within the meaning of the 1948 Act.
The petition as filed averred that the fundamental right conferred upon the respondent by article 19 of the Constitution was infringed, that the provisions of the 1948 Act which were inconsistent with that article were void as being ultra vires the Constitution and the orders passed thereunder by the Revenue Officer were illegal and liable to be set aside.
This petition was filed by the respondent on August 11, 1952, A further petition was thereafter filed on February 26, 1953 invoking article 3 of the said Agreement and it was contended that by the application of the provisions of the 1948 Act, to the said private properties of the respondent, the respondent was deprived of the " full ownership, use and enjoyment " of the properties to which he was entitled under the said Agreement, and that under article 363 of the Constitu tion, no Court had jurisdiction to deal with any dispute arising out of any provisions of the said Agreement.
The decision of the Revenue Officer was thus called in question and it was contended that he had no jurisdiction to decide the dispute as to whether the tenants had any right to the personal properties of the respondent and as such the proceedings were liable to be quashed as being without jurisdiction.
The High Court accepted these contentions of the respondent and allowed the writ petition.
It accordingly directed the issue of a writ declaring that the proceedings under the 1948 Act taken by the Revenue Officer were void as being without jurisdiction and that they should be quashed.
The tenants then filed an application before the High Court asking for a certificate under articles 132 and 1072 133(1)(c) of the Constitution which was granted by the High Court.
The State of Orissa asked for leave to intervene in the appeal which leave was granted by this Court and the learned Solicitor General has appeared before us in support of the appeal, both on behalf of the tenants who are the appellants herein, and the State of Orissa, the Intervener.
It may be noted at the outset that no question has been raised in regard to the vires of the 1950 Act, which extended inter alia the 1948 Act to the areas merged in the absorbing Province of orissa.
That being so, section 7(h) of the 1950 Act in terms would apply to the appellants before us and they would not be liable to ejectment.
The answer of the respondent, however, is that (1) the Revenue Court had by virtue of article 363 of the Constitution no jurisdiction in the disputes between the appellants and him arising out of the provisions of the said Agreement dated December 14, 1947, (2) that the full ownership, use and enjoyment of the properties which was guaranteed to him under article 3 of the said Agreement was affected by the application of the provisions of the 1948 Act, to the said lands and (3) that, he was not a " landlord " and the appellants were not the " tenants " within the meaning of the terms as defined in the 1948 Act, and, that in any event, these lands were not recognised as such by the Provincial Government which recognition was a condition precedent to the application of section 7(h) of the 1950 Act to these lands and that therefore the appellants were not entitled to the protection thereof.
The first two contentions are inter related and can be disposed of together.
The lands in question were declared to be the private properties of the respondent and he was guaranteed under article 3 of the said Agreement full ownership, use and enjoyment thereof.
Article 363 only ousted the jurisdiction of the courts in regard to the disputes arising out of any provisions of the Agreement entered into by the Rulers of Indian States with the Government of India.
The dispute which had arisen between the appellants and the respondent in the present case could hardly be said to 1073 be a dispute arising out of any provisions of the said Agreement.
The full Ownership, use and enjoyment of the properties which were declared to be the private properties of the respondent was not sought to be affected by extending the 1948 Act, to the merged State of Khandapara.
The properties which had been declared to be the private properties of the respondent were not claimed as State properties but the whole legislation proceeded on the basis that the respondent was the owner of these properties wherein he had inducted tenants and what was sought to be done was to enact a measure for the protection of those tenants.
A measure for the protection of the tenants inducted by the respondent could hardly be said to affect the full ownership, use and enjoyment of these properties by the respondent.
It no doubt imposed certain restrictions on the absolute rights which the respondent claimed in regard to the user and enjoyment of the said properties; but these measures were imposed upon him in common with all the citizens of the Union and the justification for the same could be sought under cl. 5 of article 19 of the Constitution.
Similar contentions which had been raised on behalf of the erstwhile Rulers, whose States had merged with the Provinces, were answered by this Court in The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh of Darbhanga (1) and in Visweshwar Rao vs The State of Madhya Pradesh (2).
PatanjaliSastri C. J.observed in the former case at page 915: "But a short and obvious answer is that there was no contravention of any guarantee or assurance given by the Government under the covenant of merger, as the estates in question are sought to be acquired only as the " private property " of the Rulers and not otherwise.
The compensation provided for, such as it is, is in recognition of their private proprietorship, as in the case of any other owner.
" Mahajan J. (as he then was) observed in the latter case at page 1041 : " It is true that by the covenant of merger the , 915.
(2) , 1041, I054.
1074 properties of the petitioner became his private properties as distinguished from properties of the State but in respect of them he is in no better position than any other owner possessing private property.
Article 362 does not prohibit the acquisition of properties declared as private properties by the covenant of merger and does not guarantee their perpetual existence.
The guarantee contained in the article is of a limited extent only.
It assures that the Rulers ' properties declared as their private properties will not be claimed as State properties.
The guarantee has no greater scope than this.
That guarantee has been fully respected by the impugned statute, as it treats those properties as their private properties and seeks to acquire them on that assumption.
Moreover, it seems to me that in view of the comprehensive language of article 363 this issue is not justiciable.
" Das J. (as he then was) also observed in that case at page 1054: " The guarantee or assurance to which due regard is to be had is limited to personal rights, privileges and dignities of the Ruler qua a Ruler.
It does not extend to personal property which is different from personal rights.
Further, this article does not import any legal obligation but is an assurance only.
All that the covenant does is to recognise the title of the Ruler as owner of certain properties.
To say that the Ruler is the owner of certain properties is not to say that those properties shall in no circumstances be acquired by the State.
The fact that his personal properties are sought to be acquired on payment of compensation clearly recognises his title just as the titles of other proprietors are recognised.
" It is clear therefore that neither article 363 nor article 362 of the Constitution would avail the respondent and the courts would have jurisdiction to entertain the dispute between the appellants and him which arose out of his action in ejecting them from his private lands.
The provisions of the said Agreement only protected his rights in the properties declared to be his private properties so that they could not be claimed at any time thereafter as State properties.
The did not dispute his ownership over the same but proceeded on the basis that they were his private properties and sought to impose upon him certain obligations in order to protect the rights of the tenants whom he had inducted therein and there was no infringement of the guarantee or assurances which had been given to him under article 3 of the said Agreement.
It could not also be urged that by imposing reasonable restrictions in the interests of the tenants on his right to acquire, hold and dispose of properties under cl. 5 of article 19 of the Constitution, the 1948 Act affected his rights of full ownership, use and enjoyment of those properties.
If anything was done by extending the 1948 Act to the merged State of Khandapara, it was done in the interests of the tenants and it was done for the protection of the tenants who were inducted by him and such restrictions did not affect the full ownership, use and enjoyment of his private properties, any more than they did in the case of other owners of lands.
As a matter of fact, under the terms of the 1950 Act which extended the 1948 Act to the merged State of Khandapara, he was entitled to the payment by "he tenants of such fair and equitable rent as may be fixed by any competent authority appointed in this behalf by the Revenue Commissioner or the Commissioner of the Northern Division as the case may be and so long as the tenants continued to pay such rent he was no worse off than were other proprietors of lands.
The tenants would no doubt acquire rights of occupancy in respect of such lands but the acquisition of the occupancy rights by the tenants would not be calculated to affect his right to full ownership, use and enjoyment of his lands, because he would be entitled to eject the occupancy tenants also if the tenants used the lands comprised in their holdings in any manner which rendered them unfit for the purposes of the tenancy or committed a breach of conditions consistent with the provisions of the tenancy laws in force in the merged State concerned on breach whereof they were under the terms of the contract between themselves and the landlord liable to be ejected.
As already stated I37 1076 these restrictions were for the protection of the tenants who were inducted on the lands by the erstwhile Rulers themselves and by the extension of the 1948 Act to the merged State of Khandapara, the respondent was treated in the same manner as any other citizen of the Union.
If at all there was any infringement of his rights to full ownership, use and enjoyment of his properties that was also in accordance with the provisions of the Constitution itself and whatever may have been the guarantee or assurance given to him under the terms of the said Agreement, it could not be absolute but would only be co extensive with the right to acquire, hold and dispose of property which is guaranteed to all the citizens of the Union under article 19(1)(f) of the Constitution.
These contentions of the respondent therefore are of no avail.
If, then, the provisions of the 1950 Act could be validly applied to the merged State of Khandapara in spite of article 3 of the said Agreement thus attracting the operation of the 1948 Act to his private lands it remains to consider whether the respondent was a landlord and the appellants were his tenants within the meaning of the terms as defined in that Act.
The contention of the respondent, in the first instance, is that under the terms of section 2(ii) of the Orissa Tenants Protection (Amendment) Act, 1951 (Orissa XVII of 1951) which added sub section
5 to section I of the 1948 Act, in such areas where neither the Madras Estates Lands Act, 1908, nor the Orissa Tenancy Act, 1913, was in force and the State of Khandapara was such an area the special laws or customs prevailing therein shall be taken into consideration for the application of that Act.
It is urged that the relationship between the respondent and the tenants whom he had inducted on his private properties was governed by special laws and customs and that therefore the application of the Act was excluded .
It is, however, to be observed that no such contention was ever taken in the proceedings before the Revenue Officer or before the High Court and it was urged for the first time in the course of the arguments before us.
The question is one of fact, 1077 whether any such special laws or customs were prevailing in the merged State of Khandapara, and we cannot allow the respondent to urge this contention for the first time before us.
We shall, therefore, proceed on the basis that the 1948 Act was quite properly extended to the merged State of Khandapara.
It is next contended that the definition of landlord and tenant given in section 2(c) and (g) of the 1948 Act did not apply to the relationship between the parties.
The definitions of these terms are as under: Section 2 (c). "landlord" means a person, whether a proprietor, sub proprietor, tenure holder or raiyat or under raiyat, either in the raiyatwari area or in the zamindari area or land holder or permanent undertenure holder, whose land a person, whether immediately, or mediately cultivates as a tenant; Section 2 (g). "tenant" means a person who, under the system generally known as Bhag, Sanja, Kata or such similar expression, cultivates the land of another person on condition of delivering to that person (i) either a share of the produce of such land, or (ii) the estimated value of a portion of the cropraised on the land, or (iii) a fixed quantity of produce irrespective of the yield from the land, or (iv) produce or its estimated value partly in any one of the ways described above and partly in another; but shall not include. . . . " It is urged that the tenants who were inducted by the respondent on these lands did not fulfil the terms of this definition and they were therefore not tenants and, as a logical corollary to that, the respondent could not be a landlord qua them.
It is also contended that even though these lands were declared to be the private properties of the Respondent under the decision of the Adviser for the Orissa States, that was a recognition of the lands as such by the Dominion Government and not by the Provincial Government; which recognition was a condition precedent of the application of section 7(h) of the 1950 Act to these lands.
Here 1078 also, the respondent is confronted with this difficulty that these questions were not mooted either before the Revenue Officer or the High Court in the manner in which it was sought to be done before us.
It was all along assumed that the appellants had been the tenants of the respondent but had been ejected by him in the year 1951 and other tenants were inducted in their place some time in 1952.
The lands in question were also assumed to have been recognised as the private lands of the respondent by the Government without making any distinction between the Dominion Government and the Provincial Government as was sought to be done before us.
Reliance was mainly placed by the respondent in the High Court on his plea that the jurisdiction of the Revenue Officer was barred under article 363 of the Constitution and it was nowhere urged that the appellants were not the tenants and be was not the landlord within the terms of the definitions contained in the 1948 Act or that in the absence of recognition of these private lands of his as such by the Provincial Government, the condition precedent to the application of section 7(b) of the 1950 Act was not fulfilled and that section has no application at all to these lands.
The determination of these questions also requires evidence in regard to the same and it would not be legitimate to allow these questions to be agitated for the first time at this late stage.
The matter is, however, concluded by the provisions of section 7(a) of the 1950 Act.
That section enacts a statutory extension of the definition of the terms landlord and tenant and provides that the expression 'Jandlord 'shall mean a person immediately under whom a tenant holds land, and the expression 'tenant ' shall mean a person who holds land under another person and is or, but for a special contract, would be liable to pay rent for that land to that person.
Whatever may have been the definitions of the terms landlord and tenant in section 2(c) and (g) of the 1948 Act, this definition contained in the explanation to section 7(a) of the 1950 Act makes the appellants 'the tenants 'and the respondents ' a landlord ' in regard to the lands in question.
This statutory extension of the definition of the terms 1079 'landlord ' and ' tenant ' therefore is sufficient, in our opinion, to repel the last contention urged on behalf of the respondent before us.
The respondent further contends that in spite of section 7 of the 1950 Act, enacting that all suits and proceedings between landlord and tenant as such shall be instituted and tried in revenue courts, the provisions of the 1948 Act in regard to the hierarchy of revenue courts and the procedure and the penalties provided therein are not attracted to the merged State of Khandapara.
The contention is that the provisions contained in the 1950 Act are special provisions which eliminate the operation of the general provisions contained in the 1948 Act, and in so far as nothing more is stated in regard to how the revenue courts are to act in the matter of the institution and trial of all suits and pro ceedings between landlord and tenant, there is a lacuna and the revenue courts as envisaged by the 1948 Act, have no jurisdiction to entertain the proceedings in question.
The simple answer to this contention of the respondent is that both these Acts have to be read together.
The 1950 Act is an Act to extend certain Acts and regulations to certain areas administered as part of the Province of Orissa.
The merged State of Khandapara is one of such areas.
By virtue of section 4 of this Act the 1948 Act is inter alia extended to the merged State of Khandapara and the provisions thereof are made applicable in that area.
The other sections of this Act enact further provisions which are applicable to these merged States including the merged State of Khandapara and section 7, in particular, enacts the modification of the tenancy laws in force in those merged States.
These provisions are therefore supplementary to those contained in the 1948 Act, and it follows that not only the provisions of the 1948 Act but also the provisions of the 1950 Act are applicable to the merged State of Khandapara.
If both these Acts are thus read together, as they should be, there is no inconsistency between the provisions of these Acts and it is clear that the provisions of sub section
(a) and (h) of section 7 of the which applied to the dispute which arose between the appellants and the respondent read together with the relevant provisions in regard to the procedure, penalties, etc., contained in the 1948 Act did give jurisdiction to the Revenue Officer to entertain the dispute between the parties.
This contention of the respondent also therefore fails.
We are therefore, of opinion that the judgment of the High Court was clearly wrong and is liable to be set aside.
We accordingly allow the appeal, set aside the order made by the High Court, and restore the orders passed by the Revenue Officer in the O.T.P. Act Cases Nos.
21 to 25 of 1952, 26 to 28 of 1952, 29 to 32 of 1952 and 33 to 41 of 1952.
The respondent will pay the appellants ' costs of this appeal as also of the writ petition in the High Court.
The State of Orissa will, of course, bear and pay its own costs.
Appeal allowed.

Output:
The respondent was the Ruler of the erstwhile State of Khandapara which merged in the State of Orissa on August 1, 1949.
Article 3 of the Agreement of Merger guaranteed that "the Raja shall be entitled to full ownership, use and enjoyment of all his private properties".
The Orissa Merged States ' (Laws) Act, 1950 extended the Orissa Tenant 's Protection Act, 1948 to the merged areas.
In 1951 the respondents evicted certain tenants.
The tenants applied to the Revenue Officer under the 1948 Act for being restored to possession on the allegations that the respondent was their landlord and that he had unlawfully evicted them.
The Revenue Officer allowed the applications and directed restoration of possession.
The respondent filed a petition under article 226 of the Constitution in the High Court for quashing the orders of the Revenue Officer contending, (1) that the application of the provisions of the 1948 Act to his private properties violated the guarantee given under the Agreement, (2) that article 363 Of the Constitution barred the Court from dealing with any dispute arising out of the Agreement, and (3) that the 1948 Act did not apply to him as he was not a landlord.
The High Court accepted these contentions and quashed the proceedings taken under the 1948 Act: Held, that the extension of the 1948 Act did not affect the full ownership, use and enjoyment of his properties guaranteed to the respondent under the Agreement.
The provisions of the Agreement only protected his rights to the properties declared to be his private properties so that they could not be claimed at anytime thereafter as State properties.
The guarantee given under the Agreement could not be absolute but could only be co extensive with the right to acquire, hold and dispose of property which is guaranteed to all citizens under article 19(1)(f) of the Constitution.
State of Bihar vs Maharajadhiraja Sir Kameshwar Singh of 136 1068 Darbhanga, and Visheshwar Rao vs The State of Madhya Pradesh, , followed.
Held, that the jurisdiction of the Courts to entertain the applications under the 1948 Act, was not barred by article 363 Of the Constitution.
The dispute between the appellants and respondent was not a dispute which arose out of the Agreement of Merger, and so was not covered by article 363.
Held further, that the respondent was a landlord to whom the provisions of the 1948 Act applied.
Whatever may have been the definition of the terms landlord and tenant in SS.
2(C) and (g) of the 1948 Act the definitions contained in section 7(a) of the 1950 Act, made the appellants 'the tenants ' and the respondent 'the landlord ' in regard to the lands in question.