JUDGMENT : Narasimham, C.J. - This is an application under Article 226 of the Constitution against the order of the Deputy Commissioner of Sambalpur passed under Sub-section (4) of Section 44 of the Orissa Grama Punchayats Act, 1948 dismissing the Petitioner's application challenging the validity of the levy of profession tax on the Petitioner by Lakhman pur Grama Punchayet under Clause (g) of Sub-section (2) of Section 44 of the said Act. 2. The Petitioner is the owner of a paper factory at Brajrajnagar in Sambalpur district, which is completely outside the jurisdiction of Lakhmanpur Grama Panchayet. Bamboos are the essential raw materials required for the manufacture of paper and with a view to obtain a regular supply of bamboos the Petitioner obtained leases of certain areas in Barapahar Forest Division for a period of thirty years. A portion of the leased area within the said Forest Division Lies within the jurisdiction of Lakhuianpur Grama Punchayet. The Petitioner maintains a staff at Lakhmanpur for the collection of bamboos from the leased area and their transport to Brajrajnagar. On these admitted facts Lakhmanpur Grama Punchayet levied on the Petitioner profession tax of Rs. 501- per year, purporting to act in exercise of the power conferred by Clause (g) of Sub-section (2) of Section 44 the Act, read with Rule 127(5) of the Orissa Grama Punchayet Rules. The Petitioner challenged the validity of the levy on the ground that it did not "carryon" any profession, nor did it "transact" any business within that area. 3. Clause (g) of Sub-section (2) of Section 44 of the Orissa Grama Punchayets Act, 1948, authorises a Panchayat to levy "a professional tax subject to a maximum of fifty rupees per annum on every company, firm, association or the joint Hindu family, or every person exercising a profession, trade, or calling or transacting business, or holding-appointment public or private in the local area of the Grama Sasan for a period not less than sixty days in the aggregate". Thus the jurisdiction of the Grama Punchayet to levy profession tax would arise only if the firm in question exercise a profession, trade or calling or transacts business within the area of the Grama Sasan. 4. Mr. Thus the jurisdiction of the Grama Punchayet to levy profession tax would arise only if the firm in question exercise a profession, trade or calling or transacts business within the area of the Grama Sasan. 4. Mr. G.K. Misra for the Petitioner urged that the essential part of the business of the Petitioner's firm consisted in the manufacture of paper of Brajrajnagar which was far away from the jurisdiction of Lakbmanpur Grama Punchayet and that the only operation done within the jurisdiction of the said Grama Sasan was the collection of bamboos from forests situated within the leased areas. According to Mr. Misra mere collection of bamboos from Lakhmanpur Grama Punchayet area and their transport to Brajrajnagar would not suffice to show that the firm exercised a profession, trade or calling or transacted business within the area of the Punchayet. In support of this contention he relied on two decisions of the Madras High Court reported in Municipal Council Cocandda v. 'Clan Line' Steamer and: AIR 1919 Madru 1909 and in The Municipal Council Vs. The Bombay Company, Ltd., which dealt with a similar provision in Section 53 of the Madras District Municipalities Act, 1884 and in Section 93(1)(a) of the Madras District Municipalities Act 1920, respectively. These two decisions were based on two well known English decisions reported in Grainger. Gough 1008 A.C. 46 and Lovell and Christmas v. Commissioners of Taxes 10"08 A.C. 46. In the former case it was held that a foreign firm which, through its agents, canvassed for orders for the sale of its merchandise in the United Kingdom did not exercise a trade in the United Kingdom because all contracts for sale and delivery of the merchandise to customers were made in a foreign country. This principle was applied in the latter case where, on a review of the previous decisions, their Lordships of the Privy Council observed (at page 51): One rule is easily deducible from these decided cases. The trade or business in question in such cases ordinarily. consists in making certain classes of contracts and in carrying those contracts into operation with a view to profit, and the rule seems to be that where such contracts forming as they do the essence of the business or trade, are habitually made, there a trade or business is carried on within the meaning of the Income Tax Act. consists in making certain classes of contracts and in carrying those contracts into operation with a view to profit, and the rule seems to be that where such contracts forming as they do the essence of the business or trade, are habitually made, there a trade or business is carried on within the meaning of the Income Tax Act. The principle laid down is clear from the portion under-lined above. If the trade consists in merely entering into contracts, and carrying them into operation with a view to make profit, then the place where the essence of that business or trade was habitually carried on was held to be the decisive test for determining whether the trade was carried on in that place or not. 5. In applying this principle to a firm engaged in the manufacture of certain goods the principle laid down by the Privy Council in re Commissioners of Taxation v. Kirk (1906) A.C. 88 should be followed. There it was pointed out that where a company was carrying on the business of extraction of ore from the soil, conversion of the crude ore into merchantable products by manufacturing process and the sale of that merchantable product for profit-all the aforesaid operations were' "necessary stages" and the place where each of the aforesaid operations was being carried on would be a place where the firm was carrying on its business or trade. This principle was reiterated in a decision of the Supreme Court reported in Anglo-French Textile Co. Ltd. v. Commissioner of Income Tax 23 (1953) ITR 101 (S.C.). Where a firm which was running a spinning and weaving mill at Pondicherry in French India established an agency in Madras for the sole purpose of collecting raw materials for being supplied to that mill. It was urged that where the main business of the firm consisted in the manufacture of yarn and cloth at Pondicherry the mere collection of raw materials by the agent of the firm at Madras was not sufficient to establish that the firm was carrying on any trade or business in 'Madras. It was urged that where the main business of the firm consisted in the manufacture of yarn and cloth at Pondicherry the mere collection of raw materials by the agent of the firm at Madras was not sufficient to establish that the firm was carrying on any trade or business in 'Madras. Their Lordships of the Supreme Court rejected this argument, relying on Kirk' case, (5), observing that the place where the raw materials are purchased is also a place where one of the seperations of the business of the firm was being carried on and that a portion of the profits should be deemed to have accrued at that place by virtue of Sub-section (3) of Section 42 of the Indian Income Tax Act. This case may therefore be taken as sufficient authority for the view that though the factory of a manufacturing firm may be located elsewhere, the place where the raw materials for that factory are habitually and systematically collected would also be a place where the business is carried on. Such collection of raw materials must be held to be "essence of the business' and not a mere ancillary matter. There is an earlier decision of the East Punjab High Court reported in (1950) 18 ITR 33 (P & H.) in which the same view was adopted. But in view of the latter Supreme Court decision cited above it is unnecessary to refer to many more authorities. 6. Mr. Misra thereupon contended that if such a view be taken every place in India where an agent of the firm may be sent to collect raw materials for the factory would also become a place of business and the firm will be subject to taxation by innumerable local authorities. This argument is unsound. As pointed in the aforesaid Supreme Court decision, whether a particular activity is regarded as a well-defined business operation or not depends on the accepted notions and usages. "Activities which are not well defined or are of a casual or isolated character." would not ordinarily fall within the ambit of this rule. "In a case where all that may be known is that a few transactions of purchase of raw materials have taken place in British India it could ordinarily be said that the isolated acts were in their nature operations within the meaning of that expression. "In a case where all that may be known is that a few transactions of purchase of raw materials have taken place in British India it could ordinarily be said that the isolated acts were in their nature operations within the meaning of that expression. In this case the raw materials were purchased systematically and habitually through an established agency having special skill and competency in selecting the goods to be purchased and fixing the time and place of purchase". In the instant case also the Petitioner's firm was not carrying on an isolated transaction of purchase of bamboos from an area within Lakhanpur Grama Punchayet. On the other hand it had taken lease of the forests for a period of thirty years, stationed its staff at Lakhanpur, and was systematically collecting bamboos from the leased area and transporting the same to Brajarajnagar. Such an operation would amount to "carrying on business' within the area covered by Lakhanpur Gram Panchayet. 7. Our attention was also invited to a decision of the Orissa High Court reported in AIR 1949 60 (Orissa) where it was held, on the facts of that case, that mere collection of raw materials from various Orissa States, without the raw materials undergoing any manufacturing process there, would not amount to carrying on operations in Orissa States, within the meaning of Sub-section (3) of Section 43 of the Income Tax Act. That decision was given prior to the decision of the Supreme Court in (1953) 23 1. I.R. 101. But even there it was pointed out by me that the operation of 'buying' was urrdoubtedly an essential part in the business or trade. This is sufficient for the purpose of conferring jurisdiction on the local authority to tax a business and we are not further concerned with the question as to how far that decision is correct so far as the applicability of Sub-section (3) of Section 42 of the Income Tax Act is concerned. 8. I am therefore satisfied that the Petitioner was rightly assessed to profession tax by Lakhanpur Grama Punchayet. This application is accordingly dismissed, but without costs. R.K. Das, J. 9. I agree. Final Result : Dismissed