Dalmia Cement Limited v. Commissioner Of Income Tax, New Delhi

DALMIA CEMENT LIMITED COMMISSIONER OF INCOME TAX, NEW DELHI September 10, 1976 [A. N. RAY, C.J., M. H. BEG AND P. N. SHINGHAL, JJ.] Income Tax Act, 1922, s. 2(4)-When can a single and isolated sale be a business transaction within the meaning of-Onus probandi 011 the Taxation Department-Initial purchase with intention of advantageous sale-Earning pro-fit on delivery of goods not necessary. In 1946, ·the appellant ordered cement manufacturing machinery from a firm in Denmark, for its f~ctory in Dandot, but long before the machinery was due, the country was parlit10ned and Dando! went to Pakistan. Instead of cancelling his order, the appellant imported the machinery. It was found that the appellant did so with the intention of selling it at a profit, to the Orissa State. At the time of the sale, the appellant charged only the invoice price initially paid by it, bnt later, obtained a profit. The Income Tax Officer treated the profit as income earned pursua.nt to an adventure in the nature of trade, and taxed it as such. The appellant's appeals were rejected by the Appellate Taxation Autho-rities. The inattei' was then referred to the High Court u/s. 66 ( 1) of the income Tax Act, but was dismissed. · "The. appellant contended that making a profit was not. its intention at the time of sale, and that being a single and isolated transaction of purchase and sale, it was not an adventure in the nature of trade within the meaning of s. 2( 4) of the Act, and that the onus of proving anything to the contrary, lay upon the Department. Dismissing the appeal, the Court- HELD : (i) It is well settled that even a single and isolated transaction can be held to be capable of falling within the definition of "business" if it bears clear indicia of trade. The fact that the transaction is not in the way of busi-ness of the assessee does not in an}l way alter the character of the transaction. [556H,-557A] Narain Swadeshi Weaving Mills v. Commissioner of Excess Profits Tax (25 I.T.R. 765), G. Venktttaswami Naidu & Co. v. The Commissioner of Income Tax [1959] Supp. (1) S.C.R. 646, Saroj Kumar Mazumdar v. The Commissioner of Income Tax, West Bengal, Calcutta [1959) Supp. (2) S.C.R. 846 followed. (2) It is a correct proposition of law that as it was a single and isolated transaction. of purchase and sale, the onus of proving that it was a transaction in the nature of trade lay on the department. [560 D-E] (3) The appellant had the dominant intention of selling the Dando! machi-nery to its own advantage, and acted with the set purpose of taking an advantage of its position as the owner of the imported machinery. Even if the ·appellant had not earned any profit whatsoever at the time of the sale or very soon there-after, the transaction, in the facts and circumstances of this case, would nonethe-less have been an adventure in the "nature of trade", and a business transaction within the meaning of Section 2( 4) of the Act. [560H, 561B, 562A-B] Narain Swadeshi Weaving Mills v. Commissioner of Excess Profits Tax (Supra), and G. Venkataswami Naidu & Co. v. The Commissioner of Income Tax (Supra) followed. . Kishan Prasad & Co. Ltd. v. Commissioner of Income Tax, Punjab (27, I.T.R. 49), Saroj Kumar Mazumdar v. The Commissioner of l11;co_me Tax, West Bengal, . Calcutta (Supra) Janki Ram Bahadur Ram v. Commissioner of Income Tax, Calcutta [1965] 3 S.C.R. 604. and Ajax Products Ltd. v. Commissioner of lnwrne-Tax, Madras ( 43 I.T.R. 297) distinguished. Clv1L APPELLATE JURISDICTION : Civil Appeal No. 1437 of 1971. (Appeal by Special Leave from the Judgment and order dated 28-4-1970 of the Delhi High Court in Income 'Pax Reference No. 50/ 65) V. S. Desai, Mrs, Leila Seth and Parvee11 Kumar for the Appellant. S. T. Desai & M. N. Shroff, for the Respondent. The Judgment of the Court was delivered by srfaar altace fafats| _MART WTA, TS feroit_(Dalmia Cement Limited The Commissioner of Income-tax, New Delhi) |(10 faaraz, 1976),—_ (wer warnfiaft to Ute 2%, aMTo Tao Uao aq txGlo Uyo fererer) |Shear grAm 29a Ua, 1922 (1922 a 11)—amt 2(4) ate 10-—riterit aera aaa arcana& fery etave fafrate ara ar aa eet h fae fade eectay ast feat arai——aar & faanra & afcoracaey va araeT otfeeaa & ofweia se sei at srat——aditenedt-aeaetBItT ag Ara AIA Bl UH AT Heat at Fa fzat WaT-—HS.waa % are ates F gare aT aa & ation ew age fraar—ag da Ua far & ofeoreteqsaris feat atat at fe ‘care at safe F tea’ at—cnea fearart va afm ar ot arene aferdfed feat arat deeatatt-aert,stafrar. dive fafats, ® carfaeaeitaare F HO praJ aA gat Ae who Tato faq weerr, attaert at ative ar fafratr at amt oq * atqi wert F vera & far 7 wat, 1946 aT aree feqr fragfe asia feaa area afga oer dia areal ® yan qeratTotoT ah) 1. fe Va ea WS F ofetaFT STETAT F Mae 15 var BT, war 1947 on, cafeB ofear wrdat ®1 Sa Fea HT, ot fe ala areart % faw afesaar, 1950-51% feat aaa ostat ditve fafets anee af gerdFr goatee ae fear ate gat dra F at ag agt staat ara senha Hr aTfe gat aad who vao feay moe Heatal aaa Ft at) sasare adrarat § afer atea abit ate ge avatar % are getardtiwe fafats aeodr4 fareac,1951 FT alt ae wT aTgfafaa uta 24 % fae agua at we, fram aeer A adaatga aerdtF aaa WITF 70,000 BT F Wr ST a aaa ATAATgazfaa me) wernt afarA sa wee aT Tet eHeT Aart faa ada F 1952-53 ara frat ag A amit ayafe ¥ fee ae stan (wedax)F ware F varia fetWit Gat et WATT TT FL AMAT| HATA HT TL AAH ATT(adit) 4 Wt 16faaray,1958 att mId areM HAggfafratfea frat far aveta ora aT weacTaaraTestsalt ATIAA WIC Wa are weg Hr aay vat cea sofa A fara agat afer F Se gt we aMaT atl ay AMAT AATaire afar(feett arat) ® aaet atta H ter fear ma,feat va urayat aria13 faaraz, 1960 ata waa areaare arate aferore fret fafafese wel a ara Agodt feoté ta FH far ama aa feat) wrmrat afsara at fratefrat ox afrecn 3 ag afafratfer frat fe weana deraerx‘care aT sats & fafeat er A stam’ ar aie sar ae waeaferwe fi ferq sat ga ama ar ue faawr dar fearsic ga ware & fafa at vated ser afafaaa st arer 66( 1)e yedta sea warareaa al fatece fear war| sor aaa Fag'ogfafraifes fear fe fre ana adtardt a dad fora we araat Te HT Arse fear ar, Sa aaa aH saat ara ‘gates’awa ® faa F ara st, TaaT wT HT ar oa ak ag fH zaaca & fe ae Uwe aT gee aeaaare aT, sa aaa ae afeweq a waa at vet 21 ag freee fratat q gee mara FTare at wears at fare H farot ate ae adit at aediga Fxfeat fe ara ‘fafaara’} a Teaden war aT wega wea Tasamara & arta 28 wa, 1970 ara vat facta % fees greatHt ree1 watt |QIlest HAT By, afafaatfca——_saarea FH at set 3, ae ag & fe azaraoraary, Treat F saferia ‘oars’ at safe F ste 21 waftea eqrarta A ee ae H aearea H Ho falters fee Zz atate A atearey fagrr ease arent & va afrefra adt feat arwna, fae fe ga sare & at area watt fafrs safe 3mea aleSMH oftheafaat eT WT & ah, aac aa oz Te fafafera ATT ae at vgtas & ar1 fg aAme afere @ fe fet cra ate Gam doraF at FH ageatafratted feat ar ana ¢ fe ag va aaF ga ofan Fwat wat se, afe Saat atarax Pave saraF aes ST a atSH watt a ag wt afer & fe ca awear.a fe aeraere feat atware. & fratfett ar areare adl 3,aeaserx F weg F feetat sarearoftada adi fatet (et 4)|Ba THI A ae Tete Ar fH ea aeFH aaa fH aera% va afaare a arafaa aface cara at faearfea ax faa,faart ae aifaa HUT H awe war & fie eave fee at aeraerc|araat safe H stare ar ait ag afafan st ar 2qve (4) F mre eu ‘arate’ wee Fy) ofeareyBR Maz raratt (fw 14)|/ SHINGHAL, J.-This appeal by special leave is directed against the judgment of the Delhi High Court dated April 28, 1970 in a reference made by the Income-tax Appellate Tribunal (Delhi Bench A) under C section 66 (l) of the Income-tax Act, 1922, hereinafter referred to as the Act; in respect of the following question,- "Whether on the facts and circurnsta nccs of the case the sum of Rs. 7 lakhs received from M/s Orissa Cement Ltd. was pursuant to an adventure in the nature of trade and as such tanable under the lndian .Income-tax Act, 1922 ?" The liigh Court has answered the question in the affirmutive. We shall refer to the facts giving rise to the controversy in some detail when we state them in a chronological order. It may be men-tioned, meanwhile, that the Dalmia Cement Ltd., hereinafter called the appellant, owned certain cement factories and it placed an order for the supply of four complete units of cement manufacturing nwchi-nery with M/s F.L. Smidth and Co., Copenhagen, on . February 7, 1946, to increase the production in the following factori.es,- 1. Shantinagar, 2. Dandot,. 3. balmianagar, 4. Daimiapuram .. Since the factory in Dandot fell within the territory of Pakistan Qn its con:>titntion with effect from August 15, 1947, the appellant transferred tl)e m<ichinery which· was meant for the Dandot factory (hereinafter referred a:> the Dandot machinery), to a new company known as Orissa Cement Ltd. some time in 1950-51, and charged only the invoice nri~e.w.fuio:h it had paid to M/s.F. L. Smidth and. Co: The appellant thereaf:tt>r asked- .for a ·higher price and after some negotiations the Ori~sa Cement Ltd. agreed on December 4, 1951, to pay a further &lJl11. vf Rs. 7. J:;ikh6; in lieu of which 70,000 fully paid up ordinary s;hares -of.Rs. 1-0 /- each. were given to the appellant in that company. The Incomc-ta.x Officer treated that amount as income earned bv the appe]lant pvrsuant to an adventure in the nature of ti·ade in 1952-53 asscssmei1( year, ·and taxed it as sucl1. On appeal, the Assistant 4-I234SCI/76 . A Appellate Commissioner also held in his order dated September 16, 1958 that the transfer of the Dandot machinery was an adventure in ithe nature of trade and the payment of Rs. 7 lakhs was a revenue receipt which was rightly taxed by the Income-tax Officer. The matter went up in appeal to the Income-tax Appellate Tribunal (Delhi Bench) which remanded the case to the Income-tax Officer by its order dated September 13, 1960, for report on certain specific points. On B receipt of the Income-tax Officer's report, the Tribunal held that the transaction in question was "certainly an adventure in the nature o~ trade" and dismissed the appeal. It however drew up a statement of the case, and that is how the aforesaid question of law was referred to the High Court under section 66(1) of the Act. The High Court held that by the time the appellant placed the despatch order with M/s Smidth & Co., "its intention was to purchase it with an idea to c resell" and that the fact that it was a single and isolated transaction did not materially affect the case. In reaching that conclusion the High Court took tl1e subsequent developments into consideration, and rejected the contention that the machinery was purchased by way of an "investment". The present appeal has been filed against that judg-ment of the High Court dated April 28, 1970. sat fe sata dtfe aa % asia waa F aga aqea, adieardtat ae ata aran at fe sem scat aela aaa} feat ot aHatt ae cose @ fe tam faaAA H aeatase aa st mara % few fac aw ax Hwana a, afer sad Car adt fear ate sear araHat aT——ofafrrea feat fret fe saat sera oetat Tome FT sIaaTfaaerat & arert ot feat ot ahwe: Vat vaat afarUsa AtHe F ary Hl TE BTA svat FH fread ake wal Fwae Bster FB array ar ax fear) safe galasar aramea a St a aareata Fea F fawrgs Fs are va aa atmara Fe H yer arma AY wet ar ae at face ee z fx26 .M of Law/77—9 animal saat fewer faag aét wear agar at, fry ae saefaq at aaa garaafe ag ostar F arzarat ama & facUsa AHL F TAT HUT HA FH gat at wat area F.atarat at a ae canara ay fe cela aa at aaavataeq das 78 1 afe fer at adtardt Fo aga aaeal HA fret& faz at gaat ovata wet Ft crate vetat, ate saat fareseta atin fafats at ax feataa: atrendt arastaTarma waat aaa Azara-% se fa afedr dat ar area %, a F fstaq yer srma aga ma aT, A afer satat wé of, caratwr F geal feafa ar ora aa &% fafeaawatt & ae are feat ari wa: ae saree at safeFH say& ake ox areafas Horgan at I sa wat Fag afafraaare 2(4)&- aateaia arcare aeace} Peqagrt ar1 saa arearat agt osat fe adtarata ara at oftara attoe Get& ara salfaa aét feat at ate vad sam ax& mE aafae faat gaat faser fear ot, aif ce aer & eaare aefeat at anat & fe afe adteredt a fear B ana ot vad aeoft feet st care at até ara saisa aél fot a, atatga mma F aeat F met we ah saat ofefeafaal A agaeqaare ‘orate HY wafa A, afe fett wasafe F waaaia’4 (aa8)agaa g fatedat unt ar wt Ho Te A yora ama a, Aer faq A afer wast dala ara wes acteat Fae ay sah BraA fa aa st Me cer By Fana faaat &fefart F Togaatarecfan areawrat freg tar udta dat & fe adtarat arde@ 4 fearaz, 1951aay pat F welt aa wa wa a ofaule sat ae‘Ht ana at wal at, frase aca FH ag ca-aa wat F 70,000qi eye aaa TIT eT HLA F aay gatas wdtaré tarawa ¥ dae safat ana sat at aaife ag ake afew act atAa TTA HWA Aral ATT ars Bl sa aay Talat HA Fang a warat fe ag fame & aaa aaa A afe aa F Freq aooraHM aT gH2wa. set aTFT TTae afeemrr ata oar fe ag aat safe F eT oT,say are Ht wadt aa 21 (Ft 9)on aiaHY aeFT ag ata a we &fe afaeaa aie fara arcana si gaHR deraare at, wafay ae aaaaa at at fe as eraoa safeHFderazarx Z, faaqt &t aaa # fate ar ae die sfanea& fe ea dfaaeat adiar ga starco ® mare ax at ae @ fe ae afadeA a wt fe dora aaast safe F saagz, fantGX atl adiatal at ag arasfire acta vi fe sega Aaaae vet at cde aaa F aati at fatomat F sha frameh a weit cet @facg7 trey fag atari agatta.ay A aad adi war & fH saat ate faawaal F at A agwet oT anat & fe sa ara at safe A Mae F gat FTaff& alex faaradH gaat amaSt (FT 10) [1959](1959) arate2 Tho Ato Aiko 846:+TAA. FAL AAMT TAT MITRE ATTA,|(SarojKumar MajumdarVs. TheCom- 3,10,12,missioner of Income-tax West Bengal, Calcutta);[1955] 2791S do Wo 49:>7fra care wos aaa fafates TATA MTR ATTA,.(Kishan Prasad and Co, Ltd. Vs. The Com-xmissioner of Income-tax, Punjab);3,10,12..|fatece fasrer[1961]43 ago eto BIT297:©|qaaa tierce fafats aaa oreet ATTA, AEA|m(AjaxProductsLtd.Vs.TheCom-.Mnissioner of Income-tax, Madras);10, 12nN fafan wate afsarfert: 1971at fafa aitr aeat 1437. 1965 % mrarnt fram de50 F facet Soa araTaT% arta 28 ata, 1970 aa fata sie mee F fase faeTIT THC HT TE Bite|;;WaaBY AT Aft Fo Waosarge,Aradareat ae ateratoTeaat MT aaaat waoaoare AWKTHo Uo Ah gritereat at atx &carat at ae a oft ito do Garrst WIto qo Aad smiaraa at facia -ararfanft sto cao fawa Ft fear|aratfaata faratt ae ota gan zaq Tae, 1922 (fat sad zat wardafafaanB® wa HWfafecefearward) aara66(1) Stafeat Mave Fo ATaHT ATT [Pato faa] = 1037 oie oe ota afsarco, fect were ar fq wmfade # ada 28 wia, 1970 aa feetTea AATFTfrig & faeg farafafaa oe F areaA fade gaaTHTwet a TS e—| “ga fe aor aTAa & aeat ate afefeaiaat FH areTat aad sem dae fatesAea Ta we waat uta ‘eqrare at safa A Meare’ H aT HT ATTSTgare & aa ag sfusad gene eae az, 1922% aetAmeee ge”: D Under section 10 of the Act, income-tax is payable by an assessee under the head "Profits and gains of business, profession or vocation", inter alia, in respect of the profits and gains of any "business" carried on by him, and the controversy in this case is whether the receipt of -the additional sum of Rs. 7 lakhs, over and above the cost of the Bandot machinery, could be said to arise out of any "business" of the appellant. The term "business" has been defined as follows in clause E ( 4) of section 2 of the Act,- " ( 4) "business" includes any trade, commerce, or manu-facture or any adventure or concern in the nature of trade, commerce or manufacture." The question in this case is whether the transaction was an "adventure" F in the "nature of trade" within the meaning of the definition? Some decisions have been rendered by this Court on the point, and our attention has been invited to the decisions in Narain Swadeshi Weaving !Mills v. Commissioner of Excess Profits Tax,(') Kishan Prasad and Co. Ltd. v. Commissioner of Income-tax Punjab,([2 ]) G. Venkataswami Naidu & Co. v. The Commissioner of Income-tax,(') Soroj Kumar Mazumdar v. The Commissioner of Income-tax West Bengal G Calcutta,(") and Janki Ram Bahadur Ram v. Commiss;oner of Income-tax, Calcutta([5]). Even so, on general principle can, for obvious reasons, be laid down to cover all cases of this kind because of their varied nature, so that each case has to be decided on the basis of its own facts and circumstances. It is however well settled that even a single and isolated transaction can be held to be capable of falling within the definition if it bears clear indicia of trade ( vide Narain H (I) 26 I.T.R. 765. (3) (1959] Supp. (!) S.C.R. 646. (4) (1959) Supp... (2) S.C.R. 846. (5) [1965] 3 S.C.R. 604. Swadeshi Weaving Mills v. Com111issio1ier of Excess Profits, G. Venka-taswami Naidu & Co. v. The Commissioner of Income-tax, and Saroj Kumar Mazumdar v. The Commissioner of Income-tax, West Bengal, Calcutta (supra) ) . It is equally well settled that the fact that t~e transaction is not in the way or business of the assessee does not Ill any way alter the character of the transaction (vide G. Venkataswami Naidu & Co. v. The Commissioner of Income-tax, and Saroj Kumar Mazumdar v. The Commissioner of Income-tax, West Bengal, Calcutta (supra). It would not therefore help the appellant's case merely to urge either of these points for the answer to the question will depend on a consideration of all the facts and circumstances. · The question under consideration is essentially a mixed question of fact and law. It will therefore be desirable, in the first instance, to re-state the relevant facts in a chronological order; say aaa Tee TT aT TAC Tarefear| gers gako. am 2,-7@ oa aeit faere & ofa,FB aa faa® sa ane ofeormeaer fram aeag wa afaare fFgu gaat ST ara ware TTT) a aa A ag sera fraadtaitat ana wer& fe vat srafma, 2, calfreardita ative fafaes die 4, fraF go cad cet area THT4sic sat dad ro uso feng ue weet, Hadar aT aedart Hea aA aa Rare gotHaH sera FH few.7 Hee,1946 a oex fan frat fe freafefaa areal A soreaerat wt aa ——|| 2.St1 4, STafaareet| safe qvelt FT PITSTAT 15 WAR, 1947 & ofa& ToTqt ova an & ofa F ae aa, safer miaa vaga at, at fe waa area& fan afaia at (forever gadgam grad asta aeat F wa H fafece fear maT g)1950-51% feet aaa stat dhive fafads are Te aead} at waterat ferwit vad ae FA we adh Free Ara oarfeaay at fe vat aadwho wto fery wes Frat FT Aad 1038 «seam earatefrog ofer ofera edt.gahare milaritavatara«oatsaStat: dtaee’ fafatsa afer 4 atedfearax, ait ak1951 ae 7aa ara et at ofafar ufe 8% % fae agua zt wT,frat aca 4 ottarit at ga HeratFH ca-aa wat H 70,000et Sy ST e aaraa argc gaz. ferae 1 maacatiareT°Sa THT a Gat maF eq A arr faa. wihta1952-53 arr frat agFHare at yafa F faeawmaa F wareFH sorfsa fear. gto we saa vetwa FFU AMAT| MNT HLA GeaeraH maa(atta)AF at16 faarax, 1958 aa waa mem H ag afatraifer fat fHTT TA BT HAT sit at safeH seraat BI aaae ea aT dare.tat aaer otaat fa ax waaataarad + tte ae F Ht aa ato ag AMAT WaArmataafaracan(fecturar)& ane att & aqfearTa frat sa arma at arta 13 faarax, 1960 ay WIAMeN, art arnt afar& ora fat fafatave wel Fs araceyFoard fee 24 % far ama aa fear| oaax afertat ferté frat ox ofrecn § ag ofafraticafeat fe serewaqqet ‘arate at yafs F fafrat wr & say a akvat ag atta ats at a1 fg sea ve ama aTfare dare feat wiegat sare & fafe arqatar seaafaiaam a} art 66(1) # afte seqaaraa at fataorfrat wat) sea varaTaa % ag afafsatfer feat fe fra aaaatarattet ferx woe aeat at don ar aré< feat a,waCatt aAT FT aH FTA saat BT arma aT A ‘gafaaa’ae fe aa sae & aa fare a fHF as aa vad atTH TR Tear si, TA aTAs ax arfaw wT a vara aeqt @1 ag front frat any sea eravad3 are ataera 7 faare feat ak ga acta a aedyea ax fear f&wea+[fafa]& ate at adarqay ari meta aita Tea aTaTATat ata 28 wa, 1970 a vet frig * fees greams @ Iaot| |stafaar atave qo aTTHt WITT [Pato faa]—-1039 3. afufat areae 10 % wela, fratfedtart waremt ‘frat ara & arat aie afrardt & arara FH ea ara& aaa ara, aft at aaa Fara ah afaaryvite & atafaaifedt ar araat aaa 3, at ea ATAASt afeare3, ag ae 2 fe aot adie aa Fatma B ofaaa ara eat aafafear ofa at sift % art A aE FETat amar @ fe agaftardt & fret ‘arc&afcormeaedne’art eat el ‘arease HY TPGTTT afufern # art2% ave (iv) # farafafaa eo FH at TE g-—a BCg) area) RowenaBIEeATITR, | aTPISTat faffato gaat aro, atfasa at fafrato at vatai ar arg Waa at amar wat oN.za onrmaFH ot wea 3, ag ae & fe a aeraere afcare Fgatenia ‘aray waft Asem 2t ga wTaTaT A Faaaaa F go faferaa fac Fat FATT ATA AATwaa aifan faca aaaafaera wt amqaa’, fear wate Uteamafafate aaammat oat,Gate,sito dae caveATE WS HEAL TAT HTH MTT, ALI FATE AYHAT TATAWTAE aad, raat ania, HHT TAAAR WAFTETTHFATT.meatmad, weH aTsayA faywe fafaraa % fa oracefeat21 afe, Garg at Atare dt ararcn faara eqoz are ada afsafaa agt frat,at anat faaa fe za sare % at area aot fafa safeaT ah weit oT ah wife sR ATAFT Sat “taht Hoag gt ware BA .(4) ‘business’ includes any trade, commerce ormanu-"facture or any adventure of concern in the nature of trade,commerce or manufacture.” 1a6 mf Ao HIto 765. 227 Wego Zlo WiTo 49. As has been stated, the appellant owned some cement factories in various parts of India including the one in Dandot. It placed an order with M/s. Smidth & Co., Copenhagen, for the supply of four complete units of machinery for the manufacture of cement, to increase the production of its factory at Dandot and three other factories. A firm order for all the four units was placed on February 7, 1946. It was confirmed by M/s. F. L. Smidth & Company on August 6, 1947 and the appellant was informed that the supply of the Dandot machinery would be made in various months from February 1948 to October 1948. India was partitioned, and Pakistan came into existence on August 15, 1947. Dandot fell in the territory of Pakistan. Tne appel-lant, which was an Indian Company, did not however cancel the order in respect of the Dandot machinery. On the other hand, a Director of the appellant informed the Orissa Government in his letter dated November 25, 1947 that it had "got a cement plant for which it had placed order a couple of years back", of which early delivery was expected, and that it would be willing to put it in Orissa on "suitable terms." The appellant's General Manager held discussions with the Orissa Government on January 8, 1948 for the setting up of a cement factory in Orissa. It was recorded in the note of the proceedings of that meeting that the appellant had ordered machinery for replacing its cement plant, the said machinery was expected to be shipped at an early date and parts of it would start arriving in March 1949. It was further stated that the complete supply of the plant was estimated to take about six months, and if the negotiations were fruitful the first lot of cement would be produced by the beginning of 1950. The appellant's representative insisted that a final decision might be taken at an early date so that the machinery which had to be chippcc.l. from abroad could be diverted, depending upon the decision, to the Calcutta or Bombay port. The appellant thereafter wrote a letter to M/s. F. L. Smidth and Co. (Bombay) Ltd. on September 9, 1948 directing that the plant meant for the Dandot works might be diverted to Orissa. It was specially stated in the letter as follows,- "There are certain equipmentS in the specifications of the plants for extension No. 3 and 4, which were peculiar to the layout and design for the extension at Dandot and Shanti- A nagar and they will not now fit in exactly in the same manner in our proposed new factories. As such, it is essential that the whole.specifications are carefully scrutinised and manufac-ture of the items which ar_e peculiar to the Jay out of Dandot and S)lantinagar Works only should be kept in abeyance in order to _suit the local conditions." · 3 (1959) actie 10H Ato MIX646. 4 (1959) acetttee 2uaqo Hto AIto 846. 5 (1965)3UHo alo WIXo 604. art a Teal ate ofefeafaat & arenx ox fafafera wear Ataei waft ag gfeat ¢ fe feat owe ak gam dae oF a4 ag afafratfea fear or apart 2 fe ag sa cer # ee afer& atat arat 2 afe sear ara awe ore Bane eT aet (arrat eaaet ater faea aT afew MET,sitoAHEETTAY AHS UNE HEY TAT THT MITT” IT aT FATEAFTorate aaa,ofaode see? aemrad aft) vat sare a ag at gfeax 2 fe ca acer a f&qorret Feat vt ware & fratfedt ar arzare adt 2, deuaenxo crey F feet tt ware ar ofeada vet gta 21 (sito aweSATAY AASUS HETAT SAT MTT MARA” TAT AAT TANT HATAATETTA WaT Med, TRAM ams sewage aaa afar)wd:ara BT Wet Te aet aa A octeta ars Ht aera vel arith zat sa oe Hr sat aet aval aic ofeieafaal& faare otfraiz at 4. frarcedta seq fafeaat eq & aca atx fafa an fafaTetFl wa: waMe: ag ated gerfe aaa aahaTSTaRATAe TA: at HL fear ae|.5. Het fe er ot war 2, atta? & carte F area% fahra art , fart avgia ar arcarat wt 2, dle ® aoareaTt saat awe F fafeatr F far ae Fare gt aati% vay % aed aed fora we ae, aatae acafacast feat fad fe avsta fra vat arcet ate da aaarcarat FT eet aSraT TT aH taae catFR favTwat, 1946 a fafera aréx fear qa aréte 6 AMET, 1947at Fad who teto fey ws Heat F saat ofte at vicattartat ae afear at we fe asta ara ar yer grat, 1948 8maga, 1948 an & fates ada Ffear oem t- are26>2(1959) aelqvedo FIX 1Uqo 765. aelqvedo FIX 1Uqo 765.do FIX 1Uqo 765. FIX 1Uqo 765. 1Uqo 765. 765.2(1959) aelqvedo FIX 1Uqo 765. aelqvedo FIX 1Uqo 765.do FIX 1Uqo 765. FIX 1Uqo 765. 1Uqo 765. 765.[[ Alo WI<o]].[[ 646.]]_ a 26>2(1959) aelqvedo FIX 1Uqo 765. aelqvedo FIX 1Uqo 765.do FIX 1Uqo 765. FIX 1Uqo 765. 1Uqo 765. 765.[[ Alo WI<o]].[[ 646.]] § (1959) ater 20g alo WIto 846. srefear ates To MAH ATT [AATo faa]==—-:1041 at faaraagt maT atx 15 wT, 1947 BT OfReaTA whedca4% gary asia ofaeaa * aa A wer aa) fg wie4,aif wn ada aradt ot, cesta ara H araA far a wetaT te vet fart ead aie adel & ww freae F waa25 Fata, 1947 aa Ta A selar Fl acare HT AS Tate afe sah oe ative a oe tar ag tfrat faa vat Fo 7Gae ‘samarse fear frat at faaar F max ofeara mn’ cee wer at searfr F wa at atx aA FH ae faq fewast a wart acter? ® wgrmace X 8 qaat,1948 aTsaat Hadras ar arearat ammaOf: Beta TaOFfancfarst frat) sa faarefanat at artarfeat & fern 4 agafafafad at fe attesta dthee FH aaa aaeg H cal WHS% far ast faaré aix ag searfaa ot fe oH aaa areal ataaru aa fear area ate wahGe ard, 1949 aH ATA FIAat amet | gaa wearae ot ware fee aa fH BAA: Aaa FH THWay A ATAT GE ATs AAT Aix afe aval aTHaTATH Tay, aT AASaga ale aT seer 1950 % area H at orem) atari& sfafafs A sa ara oe aie fear fH siftanfafaraa ateai fear am faaa fe saua %, faa crt are fata a artart ar, wa fafaraa oe fae wet gu sawAT aT AaEqd FY TIT AT as! Gas ave Airave! A AeA who Tao feaqs arg) (aia) fafues at9 faarax, 1948 F1 Fe fataveaxa eu wa ca fear fe ata aadfan afasta aaa atsearaaa iafeat ferwat aat——va ca & fasta xq & farafafaa| eo 4 |“frac deat 3 att 4 & faq darat® fafreat4afrra 0saeat F a fe aveta ate omfameF—ofecara art facaren % arafaa aie fearea & fra fafarve# att 4 gat ada areal A ate aa a adt amege ware Fae araere 2 fe art fattenaY adalat araaetart at we ae VA Wal Ffafratran, ot fe atate omifaame ae F masa % fae fate ¢ earia offal & waeart at ght & cert ae feat arat aTfgyt” The plants were expected to arrive from March 1949 onwards, but this would not have been possible without an import licence. The appellant obtained the licence from the Government of fndia and intimated to M/s. F. L. Smidth and Co. in its letter dated August 2, 1948 that it had been permitted to import in the Indian Dominion the two plants meant for Dandot and Shantinagar. The suppliers were accordingly c requested to intimate the dates upto which extension was require-el for the import of the machinery. A formal agreement was mad