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PETITIONER: DIRECTOR OF SUPPLIES & DISPOSALS, CALCUTTA

       Vs.

RESPONDENT: MEMBER, BOARD OF REVENUE, WEST BENGAL,CALCUTTA

DATE OF JUDGMENT: 24/04/1967

BENCH: SHAH, J.C. BENCH: SHAH, J.C. SIKRI, S.M. RAMASWAMI, V.

CITATION:  1967 AIR 1826            1967 SCR  (3) 778

ACT: Bengal Finance (Sales-tax) Act (6 of 1941), s.  2(c)-Dealer- Central  Government  disposing of  surplus  war  material-If liable to sales-tax as dealer.

HEADNOTE: Section  2(c)  of the Bengal Finance (Sales-tax)  Act,  1941 defines a "dealer" as meaning any person who carries on  the business  of selling goods in West Bengal and  as  including the Government.  The appellant was a widespread Organisation of  the  Government  of India set up  for  the  disposal  of surplus American war equipment which included goods of at diversity  and which ’had been taken over by the  Government of   India  after the Second World War.  The  Government  of India received the  equipment free of cost.  A part  of  the equipment was appropriated    by the Government of India  to their  own  use,  some  equipment  was  sold  to  the  State Governments  and other autonomous bodies, and the  rest  was sold to the public.  The sales were spread over a number  of years and goods of the value of several lakhs had been  sold in  auctions  held from time to time  after  advertising  in newspapers. On  the  question whether the appellant was a  "dealer"  and therefore liable to pay sales-tax, HELD  : (Per Sikri and Ramaswami JJ.) : In disposing of  the goods  the  appellant was not carrying on  the  business  of selling  goods,  and  therefore, the  appellant  was  not  a "dealer" within the meaning of s. 2(c) of the Act, and,  the transactions  of sale were not liable to be taxed under  the Act.  The appellant was not selling the goods for profit but was  merely  disposing  them of by  way  of  realisation  of capital. [786 B-D] Commissioner of Taxes v. British Australian Wool Realisation Association, [1931].A.C. 224 (P.C.) applied. State  of  Andhra  Pradesh v. M/s.  Abdul  Bakshi  &  Bros., [1964]  7  S.C.R.  664; 15 S.T.C. 644 (S.C.)  and  State  of Gujarat ’  v. Raipur Manufacturing Co. Ltd., [1967] 1 S.C.R. 618; 19 S.T.C. 1 (S.C.), referred to. Per  Shah  J. (dissenting) : It could be inferred  from  the totality of circumstances that the appellant was not  merely realising  capital,  but was carrying on business,  and  was

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therefore a dealer within the meaning of s. 2(c) of the  Act and liable to he assessed to sales-tax. [780 A, H] It  cannot  be  said that because the  Government  of  India received  the equipment free, of cost it could not set up  a business  to  dispose  of  that  equipment.   There  was  an organised  course of activity which was systematic and  with the  set purpose of making profit and the tests  of  volume. frequency,  continuity  and  system  generally  applied  for deciding whether there was an intention to carry on business were also satisfied. [779 G-H; 780 F-G] Nirain Swadeshi Mills v. Commissioner of Excess Profit  Tax, 26  I.T.R. 765 (S.C.) and State of Andhra Pradesh  v.  Abdul Bakshi  & Bros., [19641 7 S.C.R. 664; 15 S.T.C.  644  (S.C.) referred to.  779 Commissioner of Taxes v. British Australian Wool Realisation Association  Ltd.  [1931]  A. C. 224  (P.C.)  explained  and distinguished.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 616 of 1966. Appeal  by special leave from the judgment and  order  dated November  26, 1964 of the Calcutta High Court in  Sales  Tax Reference No. 4 of 1962. R.   Ganapathy Iyer, V. D. Mahajan and S. P. Nayyar, for the appellant. B.  Sen, P. K. Chatterjee, G. S. Chatterjee for P. K.  Bose, for the respondent. SHAH  J.  delivered a dissenting Opinion.  The  Judgment  of SIKRI and RAMASWAMI, JJ. was delivered by RAMASWAMI J. Shah,  J.  I  regret my inability to  agree  with  the  view expressed by Ramaswami, J. Section  2(c) of the Bengal Finance (Sales Tax)  Act,  1941, defines  a "dealer" as meaning "’any person who  carries  on the business  of selling goods in-West Bengal and  as  including the Government." The   Government  of  India  set  up  an  organisation   the Directorate    of   Disposals   (United   States    Transfer Directorate)-to dispose of war equipment taken over by  them from the American forces after the Second World War.  This Organisation had severalbranches under its control. A  part of the equipment was appropriated by the Government of India to  their  own use; some equipment was, sold  to  the  State Governments and other autonomousbodies; and the rest  was sold to the public. The taxing authorities held  that  the Directorate was a dealer within the meaning of theBengal Finance (Sales Tax) Act, 1941, and the High Court ofCalcutta in a reference made under S. 21(3) agreed with that view. It is common, ground that the Government of India  paid noconsideration for acquiring the equipment; they  merely set up an Organisation to dispose of the equipment.  It is not, and cannotbe  argued that because the   Government of India received theequipment free of cost it could not set up a business to disposeof that equipment. An owner of goods may commence business inthose goods by converting them into stock-in-trade of his business.The sales  made by the Government of India through the Directorate were  not casual  :  they  were spread over a  number  of  years.  The equipment  included  goods  of great  diversity  which  were disposed of with the help of a widespread Organisation.  The goods  offered  for  sale  were  frequently  advertised   in newspapers and

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780 auctions  were  held from time to time to dispose  of  the goods.   Was the Government of India, in entering upon  this activity  merely  realizing capital or was  it  carrying  on business in the American surplus war equipment ? This  Court observed in The State of Andhra Pradesh  v.  If. Abdul,Bakshi and Bros,.(1)                "The expression ’business’ though extensively               used  is  a  word of  indefinite  import.   In               taxing statutes it is used in the sense of  an               occupation,  or profession which occupies  the               time,  attention and labour of a person,  nor-               mally  with the object of making  profit.   To               regard an activity as business there must be a               course of dealings, either actually  continued               or contemplated to be continued with a profit,               motive, and, not for sport or pleasure." In   Narain  Swadeshi  Weaving  Mills  v.  Commissioner   of Excess  Profits Tax(2), Das, J., delivering the judgment  of the Court      observed               "The  word  ’business’  connotes  some   real,               substantial and systematic or organised course               of activity or  conduct with a set purpose."      An  owner of goods may dispose of his property  in  one lot or    from  time  to time in different lots.  By  merely realizing the value     of a capital asset, the owner  does not become a dealer. Where,   however,   he   sets   up   an organisation a substantial and systematic    course       of activity-to sell the goods with a profit motive, he may     in the  light of other circumstances be deemed to have  entered into an  activity  in the nature of business or  trade.  The line between   the two classes of case is thin and sometimes may be blurred. But in  the present case, it cannot be  said that the activity undertaken  by the Government of India for disposal of the American surplus   war equipment was, merely an activity of the nature of realization     of     capital. There was an organised course of activity, it was systematic and it, was with a set purpose of making profit. The   tests of  frequency,  continuity and system  which  are  generally employed in determining whether an activity for the disposal of   goods owned  by a person indicates  an  intention  to carry  on business are satisfied in this me.  The  inference does  not  arise  merely from the  existence  of  a  selling Organisation or systematic  sales, but from the totality  of circumstances.      In  Commissioner  of Taxes v. British  Australian  Wool Realization  Association Limited($), the Judicial  Committee was called (1) 15 S. T. C., 644. (3) [1931] A. C. 224.26 1. T. R. 765.  781 upon to consider whether surplus resulting from sale of wool aquired for the purpose of the First World War was  exigible to,, income-tax under the Income Tax Act, 1915 (Victoria;  6 Geo. 5 No. 2668).  The Judicial Committee agreeing with  the Supreme Court of Victoria held that the sale of surplus wool merely resulted in realisation of capital assets and no part of  it was income chargeable to tax.  The  assessee  Company was  incorporated for the purpose of selling  surplus.  wool originally,  acquire  during  the,  war.   The  Commonwealth Government  of  Australia  transferred to  the  Company  its undivided  half  of the Australian wool, and  its  share  of profits ’already realised, in, consideration of the issue of priority  wool  certificates  and fully  paid  Shares.   The Company  also  agreed  to  sell on  behalf  of  the  British

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Government  the  rest  of the wool for  a  commission.   The proceeds  of sale of the half share of the  Australian  wool exceeded  the  cost at which., it had been  taken  into  the books  of the Company.  After the priority woo  certificates were redeemed, and the whole of the capital credited as paid on the shares was paid off, a large surplus remained in  the hands  of the Company.  ’The Supreme Court of Victoria  held that  the  surplus proceeds of the sale did not  arise  from trade,  but  were  realization of capital  assets  and  were therefore  not taxable under the Income Tax Act,  1915,  and with  that the Judicial Committee agreed.   The  transaction was  unusual.  Vast quantities of wool had accumulated  both in  the  hands  of  the  British  Government  and  of   the. Commonwealth Government: they had to be realized or  wasted. It  was of vital interest to the Commonwealth  of  Australia that the realization of surplus wool should not be conducted so  as to destroy the market for the current production:  it was also essential that the operation of realization  should be conducted with due regard to the legitimate interests  of the  British  consumers With a view to devise  an  effective machinery  to serve ’this twin objective, the Company  which was to act as a common agency for disposal of ’surplus  wool in  the  hands  of the two Governments was  set  up  with  a nominal  capital.  The constitution of the Company  was  the direct result of an agreement between the two Governments, ’ and the attainment of the Government purposes was secured by agreements  which the Company- entered- into with,  the  two Governments.   The Government of the  Commonwealth  assigned the profits accrued from sales of surplus Australian wool in consideration   of  fully  paid  up  shares   and   priority certificates  to  be issued in the names  of  ’persons  or, bodies nominated by the Commonwealth Government.  There  was a separate agreement between the British Government and  the Company  about  the  disposal  of  wool  belonging  to  that Government.  Interest of the Commonwealth Government in  the surplus   wool  a  sum  exceeding’  pound  6   million   was transferred  to the Company, and it became an instrument  of conversion  of the whole of the surplus wool still,  unsold. ’For the share of the Commonwealth Government in the 782 wool  it became a medium of distribution of the net  surplus amongst  the original suppliers of wool.  The  Company  also took  over the organization under which the  realization  of wool  was proceeding for over two years before it  was.  set up,  "and a realization of surplus wool whose sole  or  even primary purpose was the acquisition of gain, whether by  the imperial  Government  in respect of one moiety,  or  by  the Association  or  its members in respect of  the other  was never again entertained".  The Judicial Committee observed at p. 249               ".  .  . . in truth and in fact  the  Associa-               tion’s  interest in the wool always was  fixed               capital  and  never was  circulating  capital.               Its  purpose  with  reference  to  it  was  to               realize  the  asset,, having done so  to  dis-               tribute  the proceeds among these entiled  and               then itself, to disappear."                The  Judicial Committee again observed at  p.               252               "All that its British board did was to utilize               on  its  behalf the organization  under  which               they  had  acted when, as a committee  of  the               Ministry  of Munitions, they were  engaged  in               the same task of realization.  In other               words,  in their Lordships’ judgment there  is

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             in the special case neither a finding, nor any               statement  of facts warranting the  conclusion               that  this Association ever indulged  in.  any               activity except that of realization which,  as               Rowlatt, J., has said, ’is not a trade.   Upon               the  facts stated, any other conclusion  would               be  tantamount  to saying that  a  realization               such as that effected by the Association  must               be  a  trade  because  of  the  bringing  into               existence  of  a  selling  organization,  made               necessary only by reason of the mere magnitude               of  the  realizations proposition  not  to  be               entertained." I have stated the facts of the case before the Judicial Com- mittee  and  the reasoning of the Board in  some  detail  to indicate that the case bears little analogy with the case we are dealing with.  I am unable to hold that a case which has been  decided on its very special facts can be deemed to  be an  authority governing the present.  The  decision  of’-the Judicial  Committee enunciates no new principle  it  applies settled principles to a very unusual set of facts. There  is  no  finding by the Sales Tax  Tribunal  that  the Directorate  was only set up for realization of the  surplus equipment, and the High Court has declined to raise any such inference.   The  High  ’Court has clearly  found  that  the Directorate   of  Disposals  (the  United  States   Transfer Directorate) was carrying on business  783 within  the meaning of S. 2(c) of the Bengal Finance  (Sales Tax)  Act, 1941.  It is difficult to upset that  finding  of the High Court in an appeal with special leave, and to  hold that  on the facts established the Directorate of  Disposals was not I carrying on business of selling goods. The appeal must therefore fail. Ramswami, J. This appeal is brought, by special leave,  from the  judgment of the Calcutta High Court dated November  26, 1964  in  a reference under S. 21(3) of the  Bengal  Finance (Sales  Tax) Act, 1941 (Bengal Act VI of 1941),  hereinafter referred to as the ’Act’. The Director of Disposals, the United States Transfer Direc- torate,  is an organisation of the Government of India.   It is  responsible  for the disposal of  surplus  American  war equipment  which  had been taken over by the  Government  of India-.   When the equipment was substantially disposed  of, its  work  was reduced to a great extent  and  therefore  it merged   with  the  office  of  the  Regional   Commissioner (Disposals)  on January 11, 1950.  Later on the  Supply  and Disposal Services of the Government of India were merged and the department was redesignated as Directorate of Supplies & Disposals.  The function of this directorate was to  dispose of  surplus  goods, and to purchase goods on behalf  of  the Government  of India.  The Director of supplies &  Disposals (hereinafter called the appellant’) was asked by the  Sales- tax  officials of the West Bengal Government to get  himself registered  as  a  ’dealer’ under the  Act.   The  appellant declined to do so, contending that he was not a ’dealer’ and that  he  was  not engaged in the  business  of  buying  and selling and was, therefore not liable to pay any sales-tax, but the contention of the appellant was overruled and he was assessed  to sales-tax for three periods from April 1,  1949 until May 31, 1951.  The appellant took the matter in appeal to the Assistant Commissioner of Commercial Taxes, Calcutta who  modified  the orders of assessment,  holding  that  the supplies  made  by the appellant were liable,  to  be  taxed except  those which were proved to be mere transfers to  its

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sister   departments  in  the  Government  of  India.    The appellant  filed revision petitions to the  Commissioner  of Commercial  Taxes  and to the Board of  Revenue,  but  these petitions  were dismissed.  As directed by the High  Court, the Board of Revenue referred the following question of law- for the decision of the High Court under S. 21(3) of the Act               "Whether   the   Director  of   Supplies   and               Disposals, United States Transfer, Directorate               having his office situated at No. 6, Esplanade               East,  Calcutta,  carries on the  business  of               selling goods in West Bengal and is, there-               784               fore,  a  ’Dealer’,  within  the  meaning   of               section  2 (c) of the Bengal Finance,  (Sales,               Tax) Act, 1941 By  its  judgment dated November 26, 1964,  the  High  Court answered  the  question in the affirmative and  against  the appellant. The question to be considered in this appeal is whether  the appellant is a ’dealer’ within the meaning of s. 2(c) of the Act  defining a ’dealer’ as "any person who carries  on  the business  of selling-goods in West Bengal and  as  including the  Government.  It was argued on behalf of  the  appellant that  the  surplus  material  was  left  in  India  at   the conclusion of the last war by the American Government to  be dealt  with by the Government of India just as  it  pleased. The  Government could have used the goods itself or  made  a gift  of them to others or thrown them away as scrap.  As  a matter  of  fact,  it was pointed out  that  a  considerable portion  of the surplus material was used by the  Government itself and the balance instead of being thrown away was sold to  the  public, and that selling of such material  did  not involve  carrying on of a ’business’ and the  appellant  was therefore not liable to be taxed as a ’dealer’ under S. 2(c) of  the  Act.  The opposite view-point was  put  forward  on behalf  of  the respondent.  It was submitted  that  surplus material  was sold in a series of transactions and  good  of the  value  of several lakhs had been sold and there  was  a profit  motive  behind the transactions.  It  was  contended that  the sales were not casual but they were spread over  a number  of years and the surplus ’Lyood’s were  disposed  of with the help, of a widespread organization It was also said that  the goods which were offered for sale were  advertised in  the newspapers and auctions were also held from time  to time.   As  pointed  out by this Court in  State  of  Andhra Pradesh  v. M/s Abdul Bakshi and Bros.(1) a person to  be  a dealer must be engaged in the business of buying or selling or supplying goods.      The          expression  "business" though extensively used in taxing    statutes, is a word  of indefinite import.  In tasking statutes,     it  is used  in the sense of an occupation, or profession which occupies the time,,  attention and labour of a person, normally with  the object of making profit.  To regard an activity as  business there  must  be  a  course  of  dealings,  either   actually continued  or contemplated. to be continued with  a  profit- motive; there must be some real and systematic or  organised course  of activity or conduct with a set purpose of  making profit.   To infer from a course of transactions that it  is intended thereby to carry on business ordinarily there  must exist  the characteristics of volume, frequency,  continuity and system indicating an intention to continue the  activity of  carrying  on  the transactions for  a  profit.   But  no single, test  or,-  group of tests  is’  decisive  of  the intention to carry on the business.  It must be decided  in the circumstances of

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(1)  15 S.T.c. 644.  785 each  particular case whether an inference could  be  raised that the assessee is carrying on the, business of purchasing or selling of goods within the meaning of the statute. In  a recent decision of this Court in The State of  Gujarat V.  Raipur  Manufacturing Co. Ltd.(1)  the  question  arose. whether   a  company  which  carried  on  the  business   of manufacturing  and  selling cotton textiles  was  liable  to sales-tax when disposing of old’ and discarded items such as stores,  machinery,  iron scrap, cans boxes,  cotton  ropes, rags, etc.  It was held that the mere fact that the sales of the items were frequent and their volume, was large, did not lead  to the presumption that when the goods  were  acquired there  was  an intention to carry on the business  in  these discarded materials, and a person who sold goods which  Were unserviceable  or  unsuitable, for his business did  not  on that  account become a dealer in those goods, unless he  had an  intention  to carry on the business of  selling  those goods.   At page 7 of the Report Shah, J. speaking  for  the Court, observed as follows               "It   is  clear  from  these  cases  that   to               attribute  an intention to, carry on  business               of  selling goods it is, not  sufficient  that               the assessee was carrying on business in  some               commodity  and  he. disposes of  for  a  price               articles discarded, surplus or  unserviceable.               It  was urged however, on behalf of the  State               that where a dealer with a view to reduce  the               cost  of production disposed of  unserviceable               articles used in the manufacture of goods  and               credits the price received in his accounts, he               must be    deemed to have a  profit-motive,for               it  would be uneconomical for the business  to               store unserviceable articles and to survive as               an  economic  unit.  But the question  is:  of               intention to carry on business of selling  any               particular  class of goods.  Undoubtedly  from               the   frequency,   volume,   continuity    and               regularity  of transactions carred on  with  a               profit-motive,  an inference that it  was  in-               tended  to carry on business in the  commodity               may  arise.   But  it does  not  arise  merely               because   the  price  received  by   sale   of               discarded  goods enters the accounts  of  the,               trader and may on an overall view enhance  his               total  profit,- or indirectly reduce the  cost               of production goods in the business of selling               in which he is engaged.  An attempt to realize               price  by  sale of  surplus  unserviceable  or               discarded  goods does not necessarily lead  to               an inference that business is intended- to  be               carried  on in those goods, and the-fact  that               unserviceable goods are-sold and not stored so               that  badly needed space is available for  the               business  of the assessee also does not,  lead               to (1)  19 S.T.C 1. 786 the inference that business is intended to be carried on  in selling those goods.  " Having  examined  the facts found by the High Court  in  the present  case, we are satisfied that the appellant  was  not carrying  on the business of buying or selling goods  within the meaning of S. 2 (c) of the Act.  It is not disputed that

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large  quantities  of war material were handed over  to  the Government  of India under the provisions of  the  Indo-U.S. agreement for the prosecution of the war.  A part of the war material was used by the Government for defence and military activities  and  there  was a huge  surplus  left  with  the Government  of India which was either no longer  useful or had  become  obsolete.   We  are of  the opinion  that  in disposing  ,of this surplus war material the  appellant  was not  carrying  on  the ,business of selling  goods  and  the transactions  of sale were not liable to be taxed under  the provisions  of the Act.  In our opinion, the  appellant  was not  selling  surplus  goods for profit but  he  was  merely disposing of the surplus material by way of realisation  and the transactions  were  therefore  not  taxable  as  sales falling within the provisions of the Act.  The view that  we have expressed is borne out by the decision of the  Judicial Committee  in  Commissioner of Taxes v.  British  Australian Wool   Realization  Association  Limited(1)  in  which   the respondent-company  was  incorporated in  1920  in  Victoria pursuant   to   an  agreement  between  the   Imperial   and Commonwealth  Governments,  for the purpose of  selling  the undisposed of surplus of wool acquired for the war, and dis- tributing the proceeds.  The Commonwealth Government  trans- ferred  to the company its undivided half of the  Australian wool  and in cash its share of profits already realized,  in consideration of the issue of priority wool certificates and fully-paid shares to its nominees, the wool suppliers.   The company also agreed with the Imperial Government to sell  on its  behalf  for  a commission all the  rest  of  the  wool, whether  Australian or not.  The wool was :all  sold  during the,years 1921 to 1924; the company had no other dealings in wool.  The proceeds of the half share of the Australian wool largely exceeded the sum at which it had been taken into the books  of the company.  The priority wool certificates  were redeemed,  and the whole of the capital credited as paid  on the shares was paid off under successive schemes  sanctioned by the Court; there remained a large surplus in the hands of the  liquidator of the company.  Assessments were made  upon the company under the Income Tax Act, 1915, of Victoria,  in respect  of proportions of the surplus proceeds of sale  and of  the commission ,earned.  The company  raised  objections thereto,  and a special ,case was stated for the opinion  of the  Supreme Court of Victoria which held that  the  surplus proceeds  of  sale  were  not a  result  of  the  trade  but realization of capital assets and were therefore not (1)  [1931] A.C. 224.  7 8 7 taxable under the Act.  The judgment of the Supreme Court of ,Victoria was affirmed by the Judicial Committee which  held that  the  surplus resulted merely from the  realisation  of capital  asset&  and  therefore no part  of  it  was  income chargeable to tax.  At page 250    of   the   Report,   Lord Blanesburgh stated as follows :-               "To  their  Lordships,  therefore,  there   is               disclosed, on their view of the facts here,  a               case   entirely  within  the  terms   of   the               following  words  from the judgment  in  Cali-               fornian  Copper Syndicate v.  Harris  [(1904)5               Tax  Cas. 159, 165], which have since been  so               often cited with approval. It is quite a  well               settled principle in dealing with questions of               assessment of income tax, that where the owner               of  an ordinary investment chooses to  realise               it, and obtains a greater price for it than he               originally acquired it at, the enhanced  price

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             is  not  profit........ assessable  to  income               tax.’ Equally applicable, in the view of their               Lordships,  are the words of Lord  Dunedin  in               Commissioner  of  Taxes  v.  Melbourne   Trust               [(1914) A.C. 1001, 1009], where he says :  ’If               the  liquidator of one of the banks had  made,               an estimate of the various assets held by  him               for  realization, and then on realization  had               obtained more than that estimate, such surplus               would  not  have  been  profit  assessable  to               income tax."               Lord Blanesburgh further observed at page  252               of the Report               "All that its British board did was to utilize               on  its  behalf the organization  under  which               they  had  acted when, as a committee  of  the               Ministry  of Munitions, they were  engaged  in               the same task of realization.  In other words,               in  their Lordships’ judgment there is in  the               special  case  neither  a  finding,  nor   any               statement  of facts warranting the  conclusion               that  this  Association ever indulged  in  any               activity except that of realization which,  as               Rowlatt,  J. has said, ’is not a trade.’  Upon               the  facts stated, any other conclusion  would               be  tantamount  to saying that  a  realization               such as that effected by the Association  must               be  a  trade  because  of  the  bringing  into               existence  of  a  selling  organization   made               necessary only by reason of the mere magnitude               of  the  realization-a proposition not  to  be               entertained." The  material  facts of this case are  closely  parallel  to those  in  the  present case and it must be  held  that  the appellant was not carrying on the business of selling  goods and  was  not a "dealer" within the meaning  of  the  Bengal Finance (Sales Tax) Act, 1941 (Bengal Act VI of 1941). 788 For  these reasons we hold that the appellant did not  carry on  the  business  of  selling.goods  in  West  Bengal   and therefore was not a dealer within the meaning of S. 2 (c) of the  Act and the question referred to the High Court.  under s, 21-(3) of the Act must be answered in the negative and in favour  of  the  appellant.  We accordingly  set  aside  the judgment of the High Court dated November 26, 1964 and allow this appeal with costs.                            ORDER In accordance with the opinion of the majority, this  appeal is allowed with costs. V.P.S. 789