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TMI Blog1954 (5) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... definition of "sale" in Section 2(h) of Act XV of 1948 must, to that extent, be declared ultra vires. For the same reason, Explanation III to Section 2(h) which provides that forward contracts "shall be deemed to have been completed on the date originally agreed upon delivery", and Section 3B which enacts that, "Notwithstanding anything contained in Section 3, the turnover of any dealer in respect of transactions of forward contracts, in which goods are not actually delivered, shall be taxed at a rate not exceeding rupees two per unit as may be prescribed", must also be held to be ultra vires. Appeal dismissed. - Civil Appeal No. 23 of 1954, W.A No. 7297 of 1951 - - - Dated:- 3-5-1954 - MEHR CHAND MAHAJAN J. AND MUKHERJEA B.K. AND VIVI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention, and issued a writ of certiorari quashing the orders of assessment, Exhibits A and B, and a writ of prohibition in respect of the proceedings for assessment of tax on forward contracts in gur and peas. The matter now comes before us in appeal under a certificate of the High Court under Article 133(1) of the Constitution. Under the Government of India Act, 1935, the Provincial Legislature derived its power to impose a tax on the sale of goods under Entry 48 in List II of the Seventh Schedule, and the U.P. Sales Tax Act XV of 1948 was enacted in exercise of this power. Section 2(h) of the Act defines "sale" as follows: "'Sale' means within its grammatical variations and cognate expressions, any transfer of property in goods for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods is to be transferred." It will be noticed that though the section groups both sales and agreements to sell under the single generic name of "contracts of sale", following in this respect the scheme of the English Sale of Goods Act, 1893, it treats them as separate categories, the vital point of distinction between them being that whereas in a sale there is a transfer of property in the goods from the seller to the buyer, there is none in an agreement to sell. When the contract is to sell future goods, and under Section 6(3) of the Sale of Goods Act even if "the seller purports to effect a present sale of future goods, the contract operates as an agreement to sell the goods", there can be no transfer of title to the goods unti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred." Section 16 enacts that, "Where there is a contract for the sale of unascertained goods no property in the goods is transferred to the buyer unless and until the goods are ascertained." Section 18, Rule 5, provides for the passing of property in future goods after they are ascertained. The distinction between a sale and an agreement to sell under Section 1 of the English Act is thus stated by Benjamin on Sale, Eighth Edition, 1950: "In order to constitute a sale there must be- (1) An agreement to sell, by which alone the property does not pass; and (2) an actual sale, by which the property passes. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the actions for conversion and detinue. Again, if there be an agreement for sale and the goods perish, the loss as a rule falls on the seller, while if there has been a sale the loss as a rule falls upon the buyer." Thus, there having existed at the time of the enactment of the Government of India Act, 1935, a well-defined and well-established distinction between a sale and an agreement to sell, it would be proper to interpret the expression "sale of goods" in Entry 48 in the sense in which it was used in legislation both in England and India and to hold that it authorises the imposition of a tax only when there is a completed sale involving transfer of title. This conclusion is further strengthened, when regard is had to the nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods the property has passed and the goods had been delivered to the purchaser and the price was payable at the time of the action brought. Secondly, upon the indebitatus count for goods bargained and sold, which was pleaded as follows: 'Money payable by the defendant to the plaintiff for goods bargained and sold by the plaintiff to the defendant': Bullen and Leake, p. 39. This count was applicable where upon a sale of goods the property had passed to the purchaser and the contract had been completed in all respects except delivery, and the delivery was not a part of the consideration for the price or a condition precedent to its payment. If the property had not passed the count would not lie: Atkinson v. Bell(1). In my view the law as to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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