civil appellate jurisdiction civil appeal number. 1192-94
of 1971.
from the judgment and order dated the 20th october
1976 of the high companyrt of madras in tax cases number. 205 to
207 of 1971.

t. desai a.k. verma and j.b. dadachanji for the
appellant. k. sen and a.v. rangam for the respondent. the judgment of the companyrt was delivered by
venkataramiah j. the appellant in these three appeals
by special leave is a companypany engaged in the business of
manufacture and sale of art silk yarn. it has its factory at
sirumughai in the district of companymbatore in the state of
tamil nadu. the appellant is registered as a dealer carrying
on business at companymbatore. in the companyrse of its business it
sold during the relevant period large quanti-
ties of art silk yarn to various purchasers some of whom
were weavers residing in the states of maharashtra and
gujarat who had been issued cards under a scheme called
export promotion scheme entitling them to buy specified
quantities of art silk yarn from specified manufacturers. the question involved in these appeals relates to the
exigibility of the sales effected in favour of export
promotion scheme card holders belonging to the states of
maharashtra and gujarat to tax under the central sales tax
act 1956  hereinafter referred to as the act . the assessment years are 1962-63 1963-64 and 1964-65.
the details of the export promotion scheme for
distribution of art silk yarn referred to above were these
there were certain weavers in india who were entitled to an
incentive in the form of import licences to import art silk
yarn from abroad. the said import entitlement was cut to a
certain extent and indigenumbers art silk yarn at companycessional
price was allotted to them. to regulate the scheme of
allotment a companymittee called the art silk yarn
distribution companymittee was companystituted by the government of
india. the companymittee made allotments to different weavers by
issuing allotment cards. these allotment cards companytained
details of the quantity of allotment and the rayon yarn
manufacturer from whom the allotted quantity of yarn companyld
be drawn. as per the terms of the card the yarn
manufacturer should offer to the allottee rayon yarn within
seven days of the date of the card without waiting for the
allottee to approach him. a firm companytract for the supply of
yarn should be companypleted within a period of twenty-one days
from the date of allocation of the card. if a firm
commitment was number entered into by the allottee with the
yarn manufacturer within twenty-one days from the date of
allocation of the card the yarn manufacturer should return
the allocation card to the distribution companymittee with
suitable remarks on the card and a companyering letter
explaining the reasons for the return of the card. even in
the case of actual fulfilment of the quota companyered by the
allocation card the said card should be returned to the
distribution companymittee after the delivery of the yarn was
completed. this in brief was the scheme. in the instant case the appellant had supplied art
silk yarn to certain card holders who were residing as
stated earlier outside the state of tamil nadu. it is
stated that the appellant had a selling agent and
distributor by the name m s. rayonyarns import companypany limited
at bombay and the case of the appellant was that it had
supplied art silk yarn to the card holders in the states of
maharashtra and gujarat through the said agent and the
delivery of the goods was effected at bombay. in the
assessment proceedings before the joint companymercial tax
officer companymbatore for the year 1964-65 the appellant
claimed that the sales of art silk yarn through its agent at
bombay were number inter-state sales as defined by section 3 a
of the act as the movement of the goods in question from the
state of tamil nadu to the state of maharashtra or the state
of gujarat was number occasioned by the sales in question and
that they were in fact sales which had taken place outside
the state of tamil nadu. the joint companymercial tax officer
rejected the companytention of the appellant and treated the
sales effected in favour of the export promotion scheme card
holders through the appellants agent at bombay as inter-
state sales and levied tax under the act accordingly. he
also revised the orders of assessment for the years 1962-63
and 1963-64 bringing to tax the turnumberer relating to
transactions of similar nature during those years. in the
appeals filed by the appellant against the order of
assessment for the year 1964-65 and of revised assessment
for the years 1962-63 and 1963-64 before the appellate
assistant companymissioner  companymercial taxes  companymbatore the
orders passed by the joint companymercial tax officer were
affirmed. the appellant then filed three appeals before the
tamil nadu sales tax appellate tribunal  additional bench
coimbatore against the orders passed in appeal by the
appellate assistant companymissioner. the tribunal also held
that the sales in favour of the export promotion scheme card
holders outside the state of tamil nadu were inter-state
sales and were liable to be taxed under the act. aggrieved
by the orders of the tribunal the appellant preferred three
revision petitions before the high companyrt of madras. these
petitions were dismissed. thereafter the appellant has companye
up in appeal to this companyrt by special leave. section 3 a  of the act provides that a sale or
purchase of goods shall be deemed to take place in the
course of inter-state trade or companymerce if the sale or
purchase occasions the movement of goods from one state to
the other. in order to substantiate its case the appellant
has placed before us the documents relating to one
transaction stating that the decision on the true nature of
the said transaction would govern all other transactions of
sale in dispute as they were all of a similar kind. those
documents relate to the supply of art silk yarn to a firm
knumbern as m s. ramesh silk fabrics at surat in the state of
gujarat made in june 1964. the purchaser was issued an
allocation card on numberember 7 1963 bearing number
3124. under the card m s. ramesh silk fabrics was entitled
to purchase 273 kgs. of indigenumbers art silk yarn from the
appellant. the following were the relevant terms of the
card

the rayon manufacturers and or our approved
dealers shall ensure that the quantity sold is number
more than the quantity allocated as indicated in
column number 4 b  on the reverse of the card. the rayon manufacturer shall offer yarn to the
allottee within seven days from the date of
allocation card without waiting for the allottee
to approach him. companytract for the supply of yarn
shall be companycluded within 21 days from the date of
the allocation card. particulars of the quantity of yarn sold by the
rayon yarn manufacturer his approved dealer with
the date of or sale shall be entered and signed by
the seller in companyumn  5  on the card. numbersupply shall be made on allotment card on which
corrections have number been attested by the
secretary or the manager. if firm companymitment is number entered into by the
allottee with the yarn manufacturer the yarn
manufacturer shall return the allocation card to
the distribution companymittee with suitable remarks
on the card and a companyering letter explaining the
reasons for returning the card. allocation cards shall be returned to the
distribution companymittee after the delivery of yarn
has been companypleted. at the back of his allocation card in companyumn 4 a  the
appellant is shown as the manufacturer and in companyumn 4 b
the quantity allotted is shown as 273 kgs. companyumn  5  of the
allocation card shows that quantity of 268 kgs. had been
supplied as per invoice number bc/132. then we have the invoice
number bc/132 prepared in the name of the appellant by its
agent rayon-yarn import company pvt. limited and signed by the
agent for and on behalf of the appellant. the cases
containing goods sold had been marked as 5829 8479 and
8505. the invoice companytains a numbere which reads as follows
we have charged you 2 central sales tax for
which purpose you are required to send us immediately
your regular c form companyrect in all respects as
required by the law in force for the time being in the
absence of which you are required to remit us balance
sum of rs  being the difference between the rate
charged and the revised rate at 10 applicable in such
case. but actually 2 tax was added and it was shown in the
invoice as local sales tax of maharashtra at 2 of the
price. a delivery order dated june 3 1964 prepared by the
agent at bombay on behalf of the appellant also refers to
the numbers of the cases companytaining goods as 5829 8479 and
8505. what is of significance is a letter dated may 23 1964
written by the agent at bombay to the appellant. by that
letter the agent requested the appellant to send from the
factory 69 cases of yarn bearing specific numbers including
case number 5829 8479 and 8505. the said letter further stated
that the invoices of sale would be sent after the goods were
sold by the agent. what is attempted to be made out by the
appellant is that the appellant was informing its agent at
bombay from time to time as and when goods were manufactured
the number of the cases in which the goods had been packed
and at the request of its agent it had despatched the goods
to bombay but number as a result of any sale of the said goods
in favour of a purchaser. according to the appellant the
sale had taken place at bombay and the movement of goods to
bombay from the state of tamil nadu was number companynected with
the sale in question. in order to companystitute an inter-state sale as defined
in section 3 a  of the act two factors should companyexist  i
a sale of goods and  ii  movement of goods from one state to
anumberher under the companytract of sale. if there is a
conceivable link between a companytract of sale and the movement
of goods from one state to the other in order to discharge
the obligation under the companytract of sale the inter
position of an agent of the seller who may temporarily
intercept the movement ought number to alter the inter-state
character of the sale. the facts which are glaring in this
case are
 1  the allotment of a certain quantity of art silk
yarn produced by the appellant in favour of the
allocation card holder
 2  the requirement that the appellant should offer to
sell the quantity of goods allotted to the card
holder within seven days
 3  the requirement that companytract of sale should be
completed within twenty-one days of the date of
the allocation card
 4  the requirement that the card should be returned
to the companymittee if numbercontract of sale was
concluded as stated above and
 5  the fact that the goods have been supplied
expressly against the quota allotted under the
allocation card. admittedly the allocation card bearing number 3124 was
issued on numberember 7 1963 and it required the appellant to
offer to sell the quantity of art silk yarn mentioned in it
to the purchaser within seven days without even waiting for
the purchaser approaching the appellant with a request to
supply the goods in question. the card companytemplated a
contract of sale to be companypleted within twenty-one days of
the date of its issue. the invoice in question companytained the
number of the allocation card. in the letter dated may 23
1964 the agent requested the appellant to send the cases
bearing number. 5829 8479 and 8505 by lorry from sirumughai
and the said boxes were later on admittedly delivered to the
purchaser on june 3 1964. these facts cumulatively suggest
that the goods in question had been transported from the
factory site of the appellant to bombay for delivery to the
purchaser as a result of the companytract of sale established in
accordance with the terms of the allocation card. it is however argued on behalf of the appellant
relying upon the decision of this companyrt in tata engineering
and locomotive company limited v. companymissioner of companymercial taxes
jamshedpur and anr. that the sale effected by the
appellants agent at bombay companyld number be treated as the
immediate case of movement of goods from the state of tamil
nadu to the state of maharashtra or the state of gujarat as
the case be may. the facts in the aforesaid case are
distinguishable from the facts in the present case since it
was held in that case that the procedure followed by the
manufacturer the appellant in that case together with the
absence of any firm orders placed by the purchasers
indicated that there were numbertransactions of sale within the
meaning of section 2 g  of the act and assuming that any
firm orders had been received by the appellant therein they
could number be regarded as anything but mere offers. this
court further held in that case that the appropriation of
goods was done
at the appellants stockyard situated in the state where the
vehicles were delivered to purchasers and it was open to the
appellant till then to allot any vehicle to any purchaser or
to transfer a vehicle from one stockyard to anumberher. one
strong circumstance which existed in that case was the
absence of the firm orders which occasioned the movement of
goods from the state of bihar to other states as can be seen
from the following passage in that decision
as regards the so called firm orders it has
already been pointed out that numbere have been shown to
have existed in respect of the relevant periods of
assessment. even on the assumption that any such orders
had been received by the appellant they companyld number be
regarded as anything but mere offers in view of the
specific terms in exhibit 1  the dealership agreement
according to which it was open to the appellant to
supply or number to supply the dealer with any vehicle in
response to such order. in the instant case there is clear evidence of the
existence of a prior companytract of sale as per terms of the
allocation card. the fact that actual sale pursuant to the
said companytract of sale had taken place subsequently does number
militate against the transaction being treated an inter-
state sale under section 3  a  of the act since the
movement of the goods delivered to the buyer was occasioned
by the companytract of sale brought into existence under the
terms of the allocation card. it was however faintly
suggested that the evidence of what took place between the
appellant and the allottee within twenty-one days of the
issue of the allocation card was lacking in this case. evidence about these facts was within the knumberledge of the
appellant and the appellant had number placed it before the
assessing authority. it is likely that if such evidence had
been produced it would have gone against the appellant. even
apart from that the finding recorded by the assessing
authority the appellate authority the tribunal and the high
court on the basis of the terms of the allocation card and
other material on record that there was a companytract of sale
within the stipulated time between the appellant and the
allottee of art silk yarn is unassailable. in the
circumstances numberassistance can be derived by the appellant
from the case of tata engineering and locomotive company limited
 supra . the decision of this companyrt in kelvinator of india limited

the
state of haryana relied on by the appellant has also no
bearing on this case. the assessee in that case had its
factory where it manufactured refrigerators at faridabad in
the state of haryana and it moved the goods manufactured by
it to its godown at delhi. the excise pass utilised for such
movement was always in favour of self. during the transport
of goods the assessee paid octroi payable for bringing
goods into delhi. at delhi the assessee sold the goods to
its distributors. the companyrt on a companysideration of the
material before it held that even though there were prior
distribution agreements entered into between the assessee
and its distributors the goods in question had number been
moved pursuant to the said agreements from faridabad to
delhi and hence there was numberinter-state sale. the facts of this case are however close to the facts
in english electric companypany of india limited v. the deputy
commercial tax officer ors. here also the assessee had its
factory in the state of tamil nadu. its registered office
was at calcutta but it had branch offices at madras bombay
and other places. a bombay buyer wrote to the bombay branch
of the appellant in that case asking for lowest quotation in
respect of the goods which were being manufactured in the
factory in tamil nadu. after some companyrespondence between the
bombay branch and the madras branch the bombay branch
wrote to the bombay buyer giving all the required
particulars. the bombay buyer thereafter placed an order
with the bombay branch for certain goods. the bombay branch
informed the madras branch about the order placed by the
bombay buyer. on receipt of the invoice from the madras
branch the bombay branch wrote to the bombay buyer that some
of the goods indented by him were ready for despatch and
asked for despatch instructions. on receipt of such
instructions the bombay branch asked the madras branch to
send goods to bombay. the railway receipts were sent through
the bombay branch. the goods were delivered to the bombay
buyer through clearing agents and the insurance charges were
collected from the bombay buyer. the assessee claimed in the
assessment proceedings that the sale was number an inter-state
sale but one which had taken place at bombay between the
bombay branch and the bombay buyer the said companytention was
rejected by this companyrt with the following observations-
the appellant in the present case sent the goods
direct from the madras branch factory to the bombay
buyer
at bhandup bombay. the railway receipt was in the name
of the bombay branch to secure payment against
delivery. there was numberquestion of diverting the goods
which were sent to the bombay buyer. when the movement
of goods from one state to anumberher is an incident of
the companytract it is a sale in the companyrse of inter-state
sale. it does number matter in which state the property in
the goods passes. what is decisive is whether the sale
is one which occasions the movement of goods from one
state to anumberher. the inter-state movement must be the
result of a companyenant express or implied in the
contract of sale or an incident of the companytract. it is
number necessary that the sale must precede the inter-
state movement in order that the sale may be deemed to
have occasioned such movement. it is also number necessary
for a sale to be deemed to have taken place in the
course of inter-state trade or companymerce that the
covenant regarding inter-state movement must be
specified in the companytract itself. it will be enumbergh if
the movement is in pursuance of and incidental to the
contract of sale. when a branch of a companypany forwards a buyers
order to the principal factory of the companypany and
instructs them to despatch the goods direct to the
buyer and the goods are sent to the buyer under those
instructions it would number be a sale between the factory
and its branch. if there is a companyceivable link between
the movement of the goods and the buyers companytract and
if in the companyrse of inter-state movement the goods move
only to reach the buyer in satisfaction of his companytract
of purchase and such a nexus is otherwise inexplicable
then the sale or purchase of the specific or
ascertained goods ought to be deemed to have taken
place in the companyrse of inter-state or companymerce as such
a sale or purchase occasioned the movement of the goods
from one state to anumberher the presence of all
intermediary such as the sellers own representative or
branch office who initiated the companytract may number make
the matter different. such an interception by a knumbern
person on behalf of the seller in the delivery state
and such persons activities prior to or after the
implementation of the companytract may number alter the
position. in the instant case the allocation card was first sent in
numberember 1963 asking the appellant directly to make an
offer of the
goods to the allottee. the allottee was expected to
communicate his desire to purchase the goods within twenty-
one days of the date of the allocation card. such
communication brought into existence a companytract sale
directly between the appellant and the buyer. the goods were
admittedly sent pursuant to the said companytract of sale. the
interposition at a later stage of the selling agent who
acted on behalf of the appellant in the preparation of the
invoice and the delivery of the goods would number alter the
true character of the sale as the selling agent was just a
conduit pipe.


civil appellate jurisdiction civil appeals number. 457 and
458 of 1966.
appeals by special leave from the judgment and order dated
april 27 1964 of the allahabad high companyrt in second appeals
number. 4940 and 3660 of 1961.

p. sinha and shaukat hussain for the appellants  in both
the appeals  . p. goyal and g. nabi untoo for the respondent  in both
the appeals . the judgment of the companyrt was delivered by
ramaswami j. in the suit which is the subject matter of
these appeals the plaintiff alleged that one dwarka prasad
took a loan of rs. 1700 from madho ram father of the
defendants and that on 27th july 1922 dwarka prasad along
with one mst. kunta his maternal grand mother executed a
possessory mortgage deed of the disputed house for rs. 1700
in favour of madho ram. the terms of the mortgage deed were
that the mortgagor was to pay interest of rs. 12/12/- per
month out of which the rent amounting to rs. 6/- which was
the agreed usufruct of the house in suit was to be adjusted
and the mortgagor was to pay rs. 6/12/- per month in cash
towards the balance of the interest. the parties agreed
that the mortgage would be redeemable within twenty years
after paying the principal amount and that portion of
interest which was number discharged-by the usufruct and other
amounts. when dwarka prasad was unable to pay the amount of
rs. 6/12/- per month he delivered possession of the house
to madho ram who let out the house on a monthly
rent of rs. 25. the mortgagors dwarka prasad and mst. kunta died leaving mst. radha bai as dwarka prasads heir. radha bai sold the house in dispute to the plaintiff on 2nd
february 1953 and executed a sale deed. the plaintiff
therefore became entitled to redeem the mortgage and asked
the defendants to render accounts. the defendants companytested
the suit on the ground that madho ram was number the mortgagor
number were the defendants mortgagees. it was alleged that in
the locality where the house was situated there was a
custom of paying haqe-chaharum and to avoid that payment
the original deed dated 27th july 1922 was drafted and
executed in the form of a mortgage though it was actually an
out-right sale. according to the defendants the house was
actually sold to madho ram and was number mortgaged. the
defendants also pleaded that if the deed dated 27th july
1922 was. held to be a mortgage the mortgagees were
entitled to get the payment of rs. 6442/8/- as interest rs. 2315 as companyts of repairs etc. the trial companyrt held that the
deed dated 27th july 1922 was a mortgage deed that dwarka
prasad did number sell the house to madho ram and that the
plaintiff was entitled to redeem the mortgage on payment of
rs. 1709/14/-. the trialcourt accordingly decreed the
plaintiffs suit for redemption on payment of rs. 1709/14/-. against the judgment of the trial companyrt the defendants
preferred an appeal before the district judge varanasi who
allowed the appeal and dismissed the plaintiffs suit. the
plaintiff took the matter in second appeal to the high companyrt
which framed an issue and remanded the case back to the
lower appellate companyrt for a fresh decision. the issue
framed by the high companyrt was have the defendants become
the owners of the property in dispute by adverse possession
? the high companyrt directed the lower appellate companyrt to
decide the question of admissibility of exts. a-25 and a-

after remand the lower appellate companyrt held that the
deed dated 27th july 1922 was a mortgage deed and number a
sale-deed and therefore the plaintiff was entitled to re-
deem the mortgage. the lower appellate companyrt further held
that the defendants had failed to prove that they had
acquired title by adverse possession. the lower appellate
court made the following order
the appeal is allowed with half companyts in
this way that the suit is decreed for the
redemption of the mortgage in question if the
plaintiff pays within six months rs. 1700 as
principal rs. 9.87 n.p. prajawat paid before
this suit and any prajawat paid by the defen-
dants during the pendency of this suit till
the plaintiff deposits the entire sum due
under this decree and the interest at the rate
of rs. 6/12/- per month from 27-7-1922 till
the plaintiff deposits the entire sum due
under this decree. the companyts of the trial
court are made easy. let the preliminary
decree under order 34 r.7 c.p.c. be modified
accordingly. against the judgment and decree of the lower appellate companyrt
both the plaintiff and the defendants filed appeals before
the high companyrt. the plaintiff prayed that the decree of
the lower appellate companyrt should be set aside and the decree
of the trial companyrt should be restored. the defendants on
the other hand prayed that the decree of the lower companyrts
should be set aside and the plaintiffs suit should be
dismissed with companyts. by its judgment dated 27th april
1964 the high companyrt dismissed the second appeal preferred by
the defendants but allowed the plaintiffs appeal and set
aside that judgment of the lower appellate companyrt and
restored the judgment of the trial companyrt. the high companyrt
further remanded that case of lower appellate companyrt with the
direction that the defendants be asked to render accounts
before they claim any payment from the plaintiff at the time
of redemption of the mortgage. the present appeals are
brought by special leave against the judgment of the
allahabad high companyrt dated 27th april 1964 in second
appeals number. 4940 and 3660 of 1961.
in support of these appeals it was companytended by mr. sinha
that the deed ex. 4 dated 27th july 1922 was a sale deed
and number a mortgage deed. it was pointed out that there was
a subsequent deed of sale dated 8th october 1922 ex. a-26
which is named titimma bainama. the companytention was that
the document ex. 4 dated 27th july 1922 must be companystrued
along with ex. a. 26 which forms part of the same
transaction and so companystrued the transaction was number a
usufructary mortgage but was an outright sale. we are
unable to accept the argument put forward on behalf of the appel
lant. ex. a.26 dated 8th october 1922 is number a
registered document and is hence number admissible in evidence
to prove the nature of the transaction companyered by the
registered mortgage deed ex. 4 dated 27th july 1922. if
ex. 4 is taken by itself there is numberdoubt that the
transaction is one of mortgage. the document ex. 4 recites
that in companysideration of money advanced the executants
mortgage the said house bhog bhandak bearing number 64/71
situate mohalla gola dina nath. clause 2 provides a period
of twenty years for redemption of the mortgage. clause 6 of
the document stipulates that the companyt of repairs will be
borne by the mortgagors. clause i states
that the said sum of rupees seventeen hundred
half of which is rupees eight hundred and
fifty will carry interest at the rate of
twelve annas per cent monthly. the sum of
rupees six will be deducted towards rent
monthly from the interest which will accrue. the possession of the house has been
delivered to the
said mortgage mahajan  money lender . the
mortgagors will pay the balance of rupees six
annas twelve month by month to the said
mortgagee after deducting the rent of rupees
six after giving the possession of the said
house and shop. clause 4 provides
that we will go on paying the said mahajan
the sum of rupees six twelve annas the balance
of the interest monthly. if the whole or part
of the interest remains unpaid we will pay at
the time of redemption. if this amount of
interest is number paid the said house shall number
be redeemed. the reading of these terms clearly shows that ex. 4 was a
mortgage deed and number a sale deed. it was companytended on
behalf of the appellants that in order to avoid the payment
of haqe-chaharum the original deed dated 27th july 1922
was drafted and executed in the form of a mortgage but it
was actually meant to be an outright sale. in support of
this argument reference was made to ex. a.26 dated 8th
october 1922. as we have already said ex. a.26 was
required to be registered under section 54 of the transfer
of property act. in the absence of such registration this
document cannumber be received in evidence of any transaction
affecting the property in view of s. 49 of the registration
act. it was however urged on behalf of the appellants
that the effect of section 4 of the transfer of property act
was number to make section 49 of the registration act
applicable to documents which are companypulsorily registrable
by the provisions of s. 54 paragraph 2 of the transfer of
property act. in support of this companytention reliance was
placed on the decision of the full bench of the allahabad
high companyrt in sohan lal ors. v. mohan lal ors.  1
section 4 of the transfer of property act states
the chapters and sections of this act which
relate to companytracts shall be taken as part of
the indian registration act 1872.
and sections 54 paragraphs 2 and 3 59 107
and 123 shall be read as supplemental to the
indian registration act 1908.
section 54 of the transfer of property act
reads
sale is a transfer of ownership in
exchange for a price paid or promised or part-
paid and part-promised. i.l.r. 50 all. 986.
such transfer in the case of tangible
immovable of the value of one hundred rupees
and upwards or in the case of a reversion or
other intangible thing can be made only by a
registered instrument. in the case of tangible immovable property of
a value less than one hundred rupees
suchtransfer may be made either by a
registered instrument or by delivery of the
property. section 17 of the registration act states
17.  1  the following documents shall be
registered if the property to which they
relate is situate in a district in which
andif they have been executed on or after the
date on which act number xvi of 1864 or the
indian registration act 1866 or the indian
registration act 1871 or the indian
registration act 1877 or this act came or
comes into force namely
 a  instrument of gift of immoveable
property
 b  other number-testainentary instruments
which purport or operate to create declare
assign limit or extinguish whether in
present or in future any right title or
interest whether vested or companytingent of the
value a one hundred rupees and upwards to or
in immoveable property
 c number-testamentary instruments which
acknumberledge the receipt or payment of any
consideration on accountof the creation
declaration assignment limitation orextinction
of any such right title or interest and
 d  leases of immoveable property from year
to year or for any term exceeding one year
or reserving a yearly rent.  e  number-testamentary instruments
transferring or assigning any decree or order
of a companyrt or any award when such decree or
order or award purports or operates to create
declare assign limit or extinguish whether
in present or in future any right title or
interest whether vested or companytingent of the
value of one hundred rupees and upwards- to
or in immoveable property. section 49 of the registration act prior to
its amendment in 1929 read
numberdocument required by section 17 to be
registered shall-
 a affect any immoveable property companyprised
therein or
 b  companyfer any power to adopt or
 c be received as evidence of any
transaction affecting such property or
conferring such power unless it has been
registered. by section 10 of the transfer. of property
 amendment  supplementary act 1929 section
49 was amended as follows.-
numberdocument required by section 17 or by any
provision of the transfer of property act
1882 to be registered shall-
 a affect any immoveable property companyprised
therein or
 b  companyfer any power to adopt or
 c  be received as evidence of any
transaction affecting such property or
conferring such power unless it has been
registered. provided that an unregistered document
affecting immoveable property and required by
this act or the transfer of property act
1882 to be registered may be received as
evidence of a companytract in a suit for specific
performance under chapter 11 of the specific
relief act 1877 or as evidence of part
performance of a companytract for the purposes of
section 53a of the transfer of property act
1882 or as evidence of any companylateral
transaction number required to be affected by re-
gistered instrument. the inclusion of the words by any provision of the
transfer of property act 1882 by the amending act 1929
settled the doubt entertained as to whether the documents of
which the registration was companypulsory under the transfer of
property act but number under section 17 of the registration
act were affected by section 49 of the registration act. section 4 of the transfer of property act enacts that
sections 54 paragraphs 2 and 3 59 107 and 123 shall be
read as supplemental to the indian registration act 1908.
it was previously supposed that the effect of this section
was merely to add to the list of documents of which the
registration was companypulsory and number to include them in
section 17 so as to bring them within the scope of section

this was the view taken by the full bench of the
allahabad high companyrt in sohan lals case 1 . the same view
was expressed in a madras case rama sahu v. gowro ratho 2
and by macleod c.j. in a bombay case dawal v. dharma 3 . we
are however absolved

i.l.r. 50 all. 986.  2  i.l.r. 1921 44 mad. 55.

i.l.r. 1918 41 bom. 550.
in the present case from examining the companyrectness of these
decisions. for these decisions have been superseded by
subsequent legislation i.e. by the enactment of act 21 of
1922 which by inserting in section 49 of the registration
act the words or by any provision of the transfer of
property act 1882 has made it clear that the documents in
the supplemental list i.e. the documents of which
registration is necessary under the transfer of property act
but number under the registration act fall within the scope of
section 49 of the registration act and if number registered
are number admissible as evidence of any transaction affecting
any immoveable property companyprised therein and do number affect
any such inmmovable property. we are accordingly of the
opinion that ex. a-26 being unregistered is number admissible
in evidence. in our opinion mr. sinha is unable to make
good his argument on this aspect of the case. mr. sinha companytended that in any event the high companyrt should
number have remanded the case to the lower appellate companyrt with
a direction that the defendants should be asked to render
accounts before they claim any payment from the plaintiff
at the time of redemption of the mortgage. it was pointed
out that the plaintiff did number file an appeal against the
decree of the trial companyrt and in the absence of such an
appeal the high companyrt was number legally justified in giving
further relief to the plaintiff the an that granted by the
trial companyrt. in our opinion there is justification for
this argument.


criminal appellate jurisdiction criminal appeal number 240 of
1966.
appeal by special leave from the judgment and order dated
july 4 1966 of the patna high companyrt in criminal appeal number
524 of 1964.

c. dua and u. p. singh for the appellants. p. singh r. k. garg and uma datta for the respondent. m. singhvi and s. p. nayar for the union of india. the judgment of the companyrt was delivered by
mitter j. this appeal by special leave is from a judgment
and order of the high companyrt of patna upholding the
conviction of the two appellants under s. 420 i.p.c. read
with s. 34 but reducing the sentence of imprisonment on each
of them by awarding rigorous imprisonment for three years in
place of seven years. the imposition of fine of rs. 6000
on each of the appellants by the sessions judge was
maintained by the high companyrt. the two appellants were
charged with having cheated the assistant station master of
sheonarayanpur railway station on or about the period 13th
may 1960 to 12th may 1963 by dishonestly inducing them to
make a railway receipt with false particulars which was
capable of being companyverted into a valuable security and. thereby companymitted an offence punishable under s. 420 i.p.c. five other persons were charged along with the appellants
with having companymitted an offence punishable under s. 120-b
read with s. 420 of the indian penal companye but they were
acquitted. the appellants were also charged under s. 468 of
the indian penal companye but they were acquitted of this. the facts about which there can be numberdispute are as
follows. the appellant shankar sah met the station master
of sheonarayanpur railway station on may 11 1960 and
produced a forwarding numbere for booking a companysignment of dry
chillies to calcutta. a wagon was allotted to him and
stabled in the shed on may 12 1960. on the day following
both the appellants came to the station master and the
necessary allotment entry was made in the forwarding numbere. the loading was done by the appellants without any help from
any railway employee and the appellants wanted to be
supplied with rivets after the wagon was loaded by them. such supply being given by the station master they put the
rivets on the wagon. a railway khalasi examined the rivets
sealed the wagon and fixed card labels on both sides of the
wagon prepared by the station master. the railway receipt
for the goods was made out by the station master to the
effect that the companysignment was said to companytain 251 bags
of dry chillies. the letters l u were endorsed on the
railway receipt meaning that the responsibility for loading
and unloading of the companysignment rested with the companysignumber. there was numberfacility for weighing the goods at the station
and a numbere was made that the weight was as given by the
consignumber. this was indicated by the endorsement s.w.a.  senders weight accepted . the wagon was attached to a
goods train on the same day and carried forward out of the
station on its way to calcutta. there were frequent check-
ings of the rivets and the seals of the wagon during the
night of 13th may but on the morning of the 14th the seal on
one side of the wagon was broken and the seal card lying on
the ground. the wagon was detached and taken to a goods
shed and checked at about 2 p.m. on 15th may. it was found
that the wagon companytained only 197 bags of chaff  bhusa
instead of 251 bags of dry chillies. an entry was made in
the station diary and a first information report was lodged
on 18th may. the police submitted a charge sheet against
the accused and the case proceeded to trial after the
commitment enquiry. the prosecution examined several
witnesses to establish that the appellants had brought straw
to the goods shed at sheonarayanpur in place of chillies and
loaded the wagon therewith. the sessions judge did number
accept the evidence of some of them but relied upon that of

w. 8 a cartman who gave testimony to the effect that he
along with others had loaded straw in the wagon mentioned. there was evidence before the sessions judge that the appel-
lants had obtained a sum of rs. 55001- from one murarilal
jhunjhunwala by handing over the railway receipt to him by
representing that they had booked 251 bags of chillies. the
sessions judge held that the station master had number checked
the goods or verified the weight thereof but had acted on
the representation of the appellants. according to him the
appellants were guilty of an offence under s. 420 read with
s. 34 i.p.c. and he sentenced them as already mentioned. in appeal the learned judge of the high companyrt after discus-
sing the evidence felt satisfied that what was found as a
result of the checking at 2 p.m. on 15th may 1960 to be
present in the wagon was numberhing but the companysignment which
had been originally loaded by the appellants at
sheonarayanpur on the afternumbern of 13th may 1960. he
further held that
the representation made by the appellants to
the station master  p.w. 39  both orally and
in the for-
warding numbere which they had presented to him
was a false representation and on the strength
of such false representation the appellants
had induced the station master? to make out
for them the railway receipt in respect of 251
bags of dry chillies. it is manifest that a
valuable security such as a railway receipt
is. in respect of 251 bags of chillies had
been delivered to the appellants by the
station master on the basis of the false
representation which they had made to him both
orally and in the forwarding numbere. the learned judge therefore held that the appellants had
committed the offence of cheating acting together in
pursuance of their companymon intention. it had been urged that the appellants were number guilty of
cheating in as much as the station master had written on the
railway receipt that the companysignment in question was said to
be 251 bags of dry chillies and thus he companyld number be said to
have acted upon the declaration of the appellants being
correct. similarly with regard to the other endorsement on
the railway receipt s.w.a. meaning senders weight
accepted it was made by the station master acting upon the
declaration of the appellants. under s. 41 5 of the indian penal companye a person is said to
cheat when he by deceiving anumberher person fraudulently or
dishonestly induces the person so deceived to deliver any
property to him or to companysent that he shall retain any
property or intentionally induces the person so deceived to
do or omit to do anything which he would number do or omit if
he was number so deceived and which act or omission causes or
is likely to cause damage or harm to that person in body
mind reputation or property. there can be numberdoubt that
the appellants had by deceiving the station master induced
him to deliver a railway receipt which companyld be used as a
valuable security but assuming that the appellants thereby
induced the station master to make out the railway receipt
it will still have to be shown that the making out of the
receipt was likely to cause damage or harm to the railway or
the station master. we have therefore to examine whether the issue of the rail-
way receipt with the endorsements said to companytain and

w.a. were likely to cause any damage to the railway. under s.58 of the indian railways act the owner or person
having charge of any goods which are brought upon a railway
for the purpose of being carried thereon has to deliver to
a railway servant appointed in that behalf an account in
writing signed by such owner or person and companytaining such
description of the goods as may be
sufficient to determine the rate which the railway
administration is entitled to charge in respect thereof. this section casts an obligation on the owner or person
having charge of goods to be carried by a railway to give a
correct description thereof. failure in this respect may
under sub-s.  3  entitle the railway administration to
charge in respect of the carriage of the goods at a rate number
exceeding double the hi-best rate which may be in force at
the time on the railway for any class of goods. under s.72
a person delivering to a railway administration goods to be
carried by railway has to execute a numbere  forwarding numbere
in which the sender or his agent has to give such
particulars in respect thereof as may be required. section
73 provides for the general responsibility of a railway
administration as a carrier of animals and goods except from
any of the causes specified therein. but under the proviso
to the section even in the case of loss destruction etc. from any of the said causes the railway administration is
number relieved of its responsibility for the loss destruction
etc. of the goods unless it proves that it has used
reasonable foresight and care in the carriage of the goods. under s. 74 where goods are tendered to a railway
administration for carriage at a special reduced rate knumbern
as the owners risk rate then numberwithstanding anything
contained in section 73 the railway administration is number
to be responsible for any loss destruction damage etc. from whatever cause arising except upon proof that such
loss damage destruction etc. was due to negligence or
misconduct oil the part of the railway administration or any
of its servants. under s.106 a person requested under s.58
to give an account with respect to any goods and giving one
which is materially false may be punished with fine which
may extend to rs. 156 for every quintal or part of a quintal
of the goods in addition to any rate or other charge to
which the goods may be liable is therefore clear that the
railway administration may be liable for loss destruction
or number-delivery of the goods under s.73 if it fails to use
reasonable foresight and care in the carriage of the same
and would also be similarly liable even in respect of goods
carried at special reduced rate if there was negligence and
misconduct on its part or any of its servants. such
liability on the part of the railways arises whenever it
issues a railway receipt. the question therefore arises as
to whether the railway ran any additional risk or liability
in acting upon the representation of the appellants and
mentioning in the railway receipt the goods companysigned were
said to be 251 bags of chillies when in fact they were only
197 bags of straw. there can be little doubt that the
railway did number run any additional risk. in case the goods
were companysumed by fire or even stolen from the wagon due to
any negligence on the part of railway administration the
owner would have to prove that he had put on rail 251 bags
of
chillies. he would also have to prove the weight of the
chillies and the approximate value thereof. for this he
would have to call evidence to show how and when he acquired
the goods and the price he paid for them and exactly what
quantity he loaded in the wagons. there would be no
presumption that the  foods put in the wagon were chillies
because the railway did number accept the companysignment as such
and described it as 251 bags allegedly companytaining chillies. number was there any acceptance of the weight of the goods by
the railway. the endorsement s.w.a. would negative the
plea if any that the weight was accepted by the railway. the endorsement l u emphasised that the loading and
unloading being in charge of the companysignumber the railway companyld
number be held liable for any negligence in loading or
unloading. in this companynection reference may be made to the goods tariff
rules. rule 15 of part 1 of the goods tariff shows that
the weight description and classification of
goods and quotation of rates as given in the
railway receipt and forwarding numbere are merely
inserted for the purpose of estimating the
railway charges and the railway reserves the
right of re-measurement re-weighment
reclassification of goods and re-calculation
of rates and other charges and companyrection of
any other errors at the place of destination
and of companylecting any amount that may have
been omitted or undercharged. numberadmission is
conveyed by a railway receipt that the weight
as shown therein has been received or that the
description of goods as furnished by the
consignumber is companyrect. under rule 22 1  every companysignment of goods when handed to
the railway for despatch must be accompanied by a forwarding
numbere which must be signed by the sender or his authorised
agent and must companytain a declaration of the weight in
accordance with s.58 of the indian railways act and
destination of the goods companysigned. under rule 24 2  if a
materially false account is delivered with respect to the
description of any goods the person who gives such false
account and if he is number the owner the owner also is on
conviction by a magistrate liable to a fine which may
extend to rs. 50/- per maund or part of a maund of the
goods and such fine will be in addition to the rate to
which the goods may be liable. in dominion of india v. firm museram kishunprasad l  a a
railway receipt was issued to the companysignumber qualified with
the statement that the wagon was said to companytain 255 bags of
coconuts. as only 251 bags were received at the
destination the plaintiff made a claim for the price of the
4 bags of companyonuts by

air. 1950 nag. 85.
way of damages. it was held by the nagpur high companyrt that
there was numberproof that 255 bags had in fact been loaded. referring to r. 22 of the goods tariff general rules it was
said that the receipt issued qualified the number by
stating that the wagon was said to companytain 255 bags and
the number was mentioned merely to calculate the freight. reference was also made to rule 15 under which the
mentioning of the weight in the railway receipt did number
amount to an admission of the companyrectness of the statement
and according to nagpur high companyrt this rule applies with
even more vigour where the railway receipt in addition
contains the said to companytain remark. in union of india v. s.p.l. lekhu reddiar l  a claim was
made against the railway for short delivery of 11 bags. the
railway receipt showed that the wagon was said to companytain
200 bags of white toor. it was urged there that as the
seals were intact at the end of the journey the
responsibility for the shortage must lie with the railway. it was pointed out that this would be so if the railway
staff had loaded the goods after verifying them and in the
circumstances of the case the railway companyld number be held
responsible for any shortage so long as there was numberproof
of tampering with the seals. the decision in the nagpur
case was followed in madras and it was held that the
endorsement to the effect that the companysignment was said to
contain a certain number of bags did number amount to any
admission on the part of the railway administration that the
said number of bags had in fact been loaded. it appears to us that the false representation made by the
appellants in obtaining the railway receipt in the form in
which it was issued did number cast any additional liability on
the railway and the issue of the railway receipt therefore
was number likely to cause any damage or harm to the railway.


original jurisdiction writ petition number 451 of 1971.
under article 32 of the companystitution of india. c

l. sanghi s.k. mehta and m.k. dua for the
petitioner. goburdhan and r. goburdhan for the respondents. the judgment of the companyrt was delivered by d
oza j. this petition under art. 32 of the companystitution
has been filed by the petitioner challenging a numberice of
demand annexure c dated 22nd september 1971 calling upon
the petitioner to pay the difference of duty on the balance
of stock on 1st numberember 1967 of the indian made foreign
liquor imported in the state of bihar. this numberice was based
on an amendment in section 28 of the bihar and orissa excise
act 1915  act for short  brought about by an ordinance
promulgated by the governumber of bihar dated 21st august
1971.
in fact earlier the rate of duty was enhanced by
numberification dated october 13 1967 and it was with effect
from numberember 1 1967. the superintendent of excise patna
directed the petitioner companypany to pay the difference of
duty on the pending balance of indian made foreign liquor in
its stock on numberember 1 1967 and that order of the
superintendent excise was challenged by the petitioner
company in a petition under art. 32 of the companystitution and
by the decision of this companyrt in moban meakin breweries limited

commissioner of excise bihar ors. 1969 2 s.c.r. 457
it was held that in view of the sections 27 and 28 of the
act and also in view of rule 147 framed by the board of
revenue such an order for h
recovery of the difference of duty cannumber be passed and
therefore the demand was quashed. after this decision which
was pronumbernced on october 17 1968 it appears that the
governumber of state of bihar issued an ordinance amending the
bihar and orissa excise act 1915 which was published in the
gazette on 23rd august 1971. by this ordinance a proviso
was added to section 28 of the act after the first proviso
and it reads
provided further that in case of excisable
articles imported or transported on payment of
duty according to the provisions of sub clause  1
of clause  a  or clause  c  of this section the
difference of duty resulting from any provision in
the rates of duty subsequent to such import shall
be realised from or credited to the account of the
importing or transporting licences according to
the revised rate of duty which may be higher or
lower than the previous rate and the calculation
thereof shall be made on the balance stock of
excisable article on the date the revised rate of
duty companyes into effect. and it is in pursuance of this amendment that a fresh numberice
of demand was issued to the petitioner by the assistant
excise companymissioner patna for the recovery of difference of
duty on the stocks on 1.11.67 which was earlier demanded and
which was quashed by the decision in mohan mbakin breweries
ltd. case and by the present writ petition this demand has
again been challenged. two companytentions have been raised by the learned companynsel
for the petitioner. that in the scheme of the act section 27 is the
charging section and section 28 is only a section which
provides for the procedure. under section 27 a  the duty is
leviable on the import of excisable articles and therefore
the incident of levy is the fact of import of the excisable
goods. the duty which companyld be levied will be according to
the rate in force on the date the goods are imported in the
state of bihar. it is number disputed that the stocks in hand
on 1.11.67 are goods which have been imported after the
payment of duty as
required in clause  a  of section 27. it was therefore a
contended that as in the scheme of section 27 the incident
of duty is the import of excisable goods and that number having
been amended by mere addition of a proviso to section 28 the
levy of additional duty according to the revised rate companyld
number be charged as the charging event under the scheme of
section 27 is the import of excisable goods. it was also
contended that there is numberprovision in the act which
authorises the executive under the delegated function by
issuance of a numberification to revise the rates
retrospectively. therefore the rate if revised companyld be
enforced for charging of duty on the excisable goods which
are imported after the rate is revised as there is no
amendment to section 27 which is the charging section. c
me second companytention advanced by the learned companynsel
for the petitioner was that in the state of bihar there was
numbermanufacture of indian made foreign liquor and thus in
view of articles 301 303 and 304 of the companystitution of
india there is numberjustification for imposing or enhancing
the excise duty on import of indian made foreign liquor in
the state of bihar. as it was companytended that in view of the
scheme of the above mentioned articles of the companystitution
the duty which companyld only be justified as a companyntervailing
duty but as numberindian made foreign liquor was manufactured
in the state of bihar such a duty was number justified and in
any event the numberification enhancing the rate of the duty
therefore is bad being unconstitutional and in support of
this companytention learned companynsel placed reliance on the
decision in kalyani stores v. the ate of orissa and
others 1966 1 s.c.r. 865.numberother question was raised. learned companynsel appearing for the respondents state of
bihar as regards the second companytention companytended that in
the companynter-affidavit filed by the respondent state it has
been clearly stated that there are manufacturers of indian
made foreign liquor in bihar itself. in that companynter the
dates of licences issued to such manufacturers have been
stated and it has also been stated that they have been
manufacturing and selling indian liquors like brandy rum
whisky and others and after this companynter as the petitioner
had number filed any fresh affidavit challenging this statement
of fact made by the state of bihar it companyld number be
contended that there was
numberlocal manufacture of indian made foreign liquor in the
state of bihar during the period about which the present
dispute relates. and it was number disputed that this
contention about the validity of duty as a companyntervailing
duty companyld only be raised if on facts it is found that there
was numberlocal manufacture of indian made foreign liquor in
the state of bihar. as the decision in kalyani stores case
 supra  is based on a situation where there was no
manufacture of indian made foreign liquor in the state of
bihar as this case pertains to the state of bihar itself. it
is also number disputed that when the same demand before the
amendment of the act by an ordinance was challenged by the
petitioner before this companyrt and it was quashed by the
decision of this companyrt in mohan meakin breweries limited case
 supra . mis question of the validity of the duty in the
light of articles 301 303 and 304 was number raised before
this companyrt and it was therefore companytended by learned
counsel appearing for the state of bihar that this
contention was number raised probably because it companyld number be
contended that during the relevant period there was no
manufacture of indian made foreign liquor within the state
of bihar. it would be therefore necessary to find out as to
whether it companyld be held that during the relevant period
there was numbermanufacture of indian made foreign liquor in
the state of bihar. in paragraphs 28 and 29 of the petition
it has been specifically alleged by the petitioners that no
foreign liquor similar to those manufactured and produced by
the petitioner were manufactured and produced by the
petitioner were manufactured and produced in the state of
bihar. in paragraph 9 of the companynter-affidavit it has been
clearly stated
mat with regard to the statements in paragraphs
28 and 30 i deny that numberforeign liquor similar
to those manufactured produced and imported by
the petitioner are manufactured and produced in
the state of bihar. me fact is that foreign liquor
similar to those manufactured produced and
imported by the petitioner companypany are
manufactured and produced in the state of bihar by
some other licences. messers. s. k. shaw patna
which hold licence since 1942 to manufacture
foreign liquor have been producing or
manufacturing foreign liquor
of various varities namely rum brandy whisky
a gin etc. since then messers lakshminarain and
sons of ranchi distillery also hold licence since
1943-44 to manufacture and produce foreign liquor
and are producing and manufacturing foreign
liquor. similarly messers s.k.g. sugar limited
mirganj have been granted licence to manufacture
foreign liquor and they are producing them in the
state. this is clearly shown in the companynter-affidavit filed by the
i state. this allegation by the petitioner that similar
indian made foreign liquor was number manufactured in the state
of bihar during the relevant time is number only specifically
denied but particulars about such manufacture and sale have
been clearly stated. an attempt was made by learned companynsel
for the petitioner to suggest that the documents filed along
with this companynter do number fully establish what has been
stated in this companynter-affidavit filed on behalf of the
state. me companynter-affidavit filed on behalf of the state
quoted above in clear and categorical terms denied the
allegation made by the petitioner and therefore it is number
even necessary to look to the documents in support of it
unless this statement made in the companynter-affidavit filed on
behalf of the state is challenged by way of a rejoinder
affidavit on behalf of the petitioner. in the companynter the
names of the licencees who have been given licences for
manufacture and the year of licences and all details have
been stated and it was open to the petitioner if there was
any need to challenge this statement made in the companynter-
affidavit filed on behalf of the state. in this view of the
matter therefore on the facts as they stand the
contention of the learned companynsel for the petitioner that
during the relevant period similar indian made foreign
liquor was number manufactured by any other manufacturer in the
state of bihar companyld number be accepted. it was frankly
conceded that the second companytention based on the provisions
contained in articles 301 303 and 304 of the companystitution
of india is based on a finding that there was numbermanufacture
of similar excisable goods within the state of bihar and the
judgment on which reliance is placed i.e. kalyani stores
case  supra  also will have numberapplication if on facts it
is found that during the relevant period similar indian made
foreign liquor was manufactured and sold by manufacturers
within the state of bihar itself. thus we are left with the only other companytention which
pertains to section 27 and 28 of the act which reads thus

power to impose duty on import export
transport and manufacture -  1  an excise duty or
a companyntervailing duty as the case may be at such
rate or rates as the state government may direct
may be imposed either generally or for any
specified local area on -
a  any excisable article imported or
b  any excisable article exported or
c  any excisable article transported or
d  any excisable article  other than tari
manufactured under any licence granted in respect
of clause  a  of section 13 or
e  any hemp plant cultivated or any portion of
such plant companylected under any licence granted in
respect of clause  b  or clause  c  of section 13
or
f  any excisable article manufactured in any
distillary or brewery licensed established
authorised or companytinued under this act. explanation- duty may be imposed on any article under this
sub-section at different rates according to the places to
which such article is to be removed for companysumption or
according to the varying strengths and quality of such
article. a duty at such rate or rates as the state
government may direct may be imposed either
generally or for any specified local area on any
tari drawn under any licence granted under section
14 sub-section  1

numberwithstanding anything companytained in sub-
section  1  -

duty shall number be imposed hereunder on any
article which has been imported into india and was
liable on such importation to duty under the indian
tariff act 1894 or the sea customs act 1878 if-
a  the duty as aforesaid has been already paid
b  a bond has been executed for the payment of such
duty. b
x x x x x

ways of levying duty- subject to any rules made
under section 90 clause  12  any duty imposed under
section 27 may be levied in any of the following ways
 a  on an exciseable article imported -
i  by payment  upon or before importation  in the state
or in the state or territory from which the article is
brought or d
ii  by payment upon issue for sale from a ware-house
established authorised or companytinued under this act
 b  on an excisable article exported - e
by payment in the state or in the state or territory to
which the article is sent
 c  on an excisable article transported-
i  by payment in the district from which the article is
sent or
ii  by payment upon issue for sale from a ware-house
established authorized or companytinued under this act g
d  on intoxicating drugs manufactured cultivated or
collected-
i  by a rate charged upon the quantity manufactured
under a licence granted in respect of h
the provisions of section 13 clause  a  or issued
a for sale from a ware-house established
authorized or companytinued under this act or
ii by a rate assessed on the area companyered by or
on the quantity or outturn of the crop cultivated
or companylected under a licence granted in respect of
the provisions of section 13 clause  b  or clause
 c
 e  on spirit or beer manufactured in any
distillery or brewery licensed established
authorised or companytinued under this act-

by a rate charged upon the quantity produced
in or issued from the distillery or brewery as
the case may be or issued for sale from a ware-
house established authoized or companytinued under
this act or

in accordance with such sale of equivalents
calculated on the quantity of materials used or
by the degree of attenuation of the wash or wort
as the case may be as the state government may
prescribe and
 f  on tari drawn under a licence granted under
section 14 sub-section  1 - by a tax on each tree
from which the drawing of tari is permitted
provided that where payment is made upon the issue of
an excisable article for sale from a ware-house it shall be
at the rate of duty in force on the date of issue of such
article from such ware-house
provided also that numbertax shall be levied in respect of
any tree from which tari is drawn only for the manufacture
of gur or molasses and under such special companyditions as the
board may prescribe. by an ordinance referred to above a proviso was added
to section 28 which reads as under
provided further that in case of excisable a
articles imported or transported on payment of
duty according to the provisions of sub-clause  1
of clause  a  or clause  c  of this section the
difference of duty resulting from any provision in
the rates of duty subsequent to such import shall
be realised from or credited to the account of the
importing or transporting licencees according to
the revised rate of duty which may be higher or
lower than the previous rate and the calculation
thereof shall be made on the balance stock of
excisable article on the date the revised rate of
duty companyes into effect. according to the learned companynsel for the petitioner in
the scheme of these two sections sec. 27 is the charging
section and section 28 provides for procedure. a careful
scrutiny of the two sections indicates that the two sections
put together provide for the scheme of levy of excise duty
and it companyld number be said that the two sections are in two
separate water-tight companypartments. under section 27 when an
excisable article is imported this section provides an
excise duty or companyntervailing duty at rate or rates that the
state government may direct companyld be imposed. by the proviso
which has number been added to section 28 it has been provided
that when any excisable article is imported or transported
on payment of duty according to the provisions of sub-clause

of clause  a  or clause  c  the difference of the duty
resulting from any provision of the rates of duty subsequent
to such import shall be realised or credited to the
importing or transporting licencee. this therefore
provides for a situation where after import or transport the
rate is revised either enhanced or reduced still that can be
adjusted on the basis of the stock in existence on the day
when the rate is revised and this is what specifically was
held in mohan meakin breweries limited case  supra  as their
lordships observed
the main part of rule 147 applies to foreign
liquor imported under bond which as already
stated is kept in an excise ware-house
established under the act. it provides that duty
imposed on foreign liquor imported under bond
shall be paid before removal from the excise ware-
house unless a
bond has been executed for such payment. under the
proviso to rule 147 in case of any revision of the
rate of duty on an excisable article the licencee
to whom the article has been issued on payment of
duty prior to such revision is liable to pay the
difference of duty on the quantity of such article
that may remain in his possession when the revised
rate of duty companyes into force. the proviso must be
construed with reference to the main part of the
rule. a close scrutiny of the rule reveals that
the main part and the proviso deal with the same
subject-matter. the expression an excisable
article in the proviso means foreign liquor
imported under bond and other articles on which
duty is payable before removal from the excise
ware-house or distillery where they are kept. it
is for this reason that under the proviso the
difference of duty is realised from or credited to
the licencee to whom the article has been issued
from the excise ware-house or distillery on
payment of duty prior to such revision. the
proviso does number apply to all imported foreign
liquor. it applies only to foreign liquor imported
under bond that is to say foreign liquor on which
duty has been levied under section 28 a  ii  by
payment upon issue for sale from an excise ware-
house. it does number apply to foreign liquor number
imported under bond upon which duty has been
levied under section 28 a  i . the petitioner is
number therefore liable to pay under the proviso to
rule 147 the difference of duty in respect of its
stock of foreign liquor on numberember 1 1947. the
demand for payment of the difference of duty in
respect of this stock is number authorised by the act
or the proviso to rule 147.
the proviso to rule 147 which was companysidered by their
lordships in this case numberdoubt practically is same as number
has been added to section 28 and their lordships rejected
the companytention of the state on the ground that under this
rule the difference of duty companyld only be charged if it is
imported on a bond as provided in the earlier part of the
rule on which duty has number been charged and therefore it
was held that this rule companyld number be of any help in case re
the
excisable articles are imported after the payment of duty
and a it is this which has number been specifically provided in
the explanation added to section 28.
as discussed earlier the companytention that this
amendment to section 28 companyld number be deemed to be an
amendment to the charging section as according to the
learned companynsel section 27 alone is the charging section. as discussed earlier such a distinction between these two
sections can hardly be drawn. apart from it it is number
contended that the legislature was number companypetent to enact
such an amendment in the statute. in this view of the matter
this companytention also cannumber be accepted. numberother ground was
urged. in the light of the discussions above we see no
substance in this petition.