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TMI Blog1952 (5) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the assessments made by the Superint- endent of Taxes, Shillong. The learned Assistant Commissioner dismissed the seven appeals on 25th January, 1950. Against the decision of the Appellate Commissioner, the assessees appealed to the Commissioner of Taxes, Assam, on 19th March, 1950, under Rule 27 of the Assam Sales Tax Rules. Just as the Appellate Assistant Commissioner had disposed of the appeals of the seven assessees before him by one order, the learned Commissioner of Taxes, Assam, did likewise by his order dated 31st August, 1950. The seven assessees then filed seven petitions on 24th November, 1950, under sub-section (2) of Section 32 of the Assam Sales Tax Act of 1947 requiring the Commissioner to refer certain questions of law arising out of his order dated 31st August, 1950, to this Court. The questions referred to us by the learned Commissioner of Taxes, Assam, are these: "(1) Whether the despatches of 41 consignments of jute by the petitioners to their respective buyers as consignees and against contracts entered into prior to the despatches constitute a 'sale' for purposes of the Assam Sales Tax Act, 1947 (Assam Act XVII of 1947) and for that matter the turnover th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against prior contracts of sale made in Calcutta. In other words, out of a total of 46 consignments, 41 were consigned by the assessees to their buyers as consignees, against contracts of sale made in Calcutta prior to the dates of despatch. The remaining five consignments, three of which belonged to Tolaram Surujmal and two to Lalchand Todi, were despatched to the commission agents as consignees, but were not made against any contracts of sale. Two specimen bought and sold notes communicated by the broker to the buyers and sellers respectively appear, one at page 100 of the printed book in Reference No. 1 of 1951 and the other at page 8 of the printed book in Reference No. 3 of 1951. It is unnecessary to reproduce the two specimen forms in their entirety. It is sufficient to set out certain terms and conditions material to the purposes of our decision. The terms and conditions as to delivery were that the jute contracted for was to be delivered free at the buyers' mills or godowns at Calcutta, where it was to be weighed. But before the goods were delivered at the buyers' mill or godown, the buyers were required to pay 90% of the price of the goods against delivery of documents, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e supplies were in respect of "unascertained goods" as alleged. jute was the goods contracted for and supplied and, as such, not "unascertained goods. " It will thus be seen that the despatches constituted a "sale" as defined in sub-section (12) of Section 2 of the Act, and the turnover therefrom was taxable in the hands of the particular dealer under the Act. Question No. 2.-The functions of the commission agent are des- cribed in paragraph 5 of Annexure A of the petition for reference. It will appear that the functions ascribed to him cannot be discharged by him in the absence of a transfer, to him, of property in goods despatched to him. This transfer is in the nature of one for 'deferred payment' and takes place at the time the goods are placed aboard a steamer or rail and con- signed to him. It will thus appear that the despatch of the 5 consign- ments by two of the petitioners involved a transfer by them of property in goods for deferred payment and constituted a "sale" taxable under the Act. Question No. 3.-This point has been adequately dealt with in the orders of the appellate authorities and I agree with their conclusion. Section 297(1)(a) of the Government of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, charge or pledge. It also includes a transfer of goods on the hire-purchase or other instalment system of payment, notwithstanding the fact that the vendor may retain the title in the goods as a security for payment of the price; Explanation: Notwithstanding anything to the contrary in the Indian Sale of Goods Act, 1930, the sale of any goods which are actually in the Province at the time when the contract of sale (as defined in that Act) in respect thereof is made, shall, irrespective of the place where the said contract is made, be deemed, for the purposes of this Act, to have taken place in the province." From the reference made by the Commissioner, it is not clear to us whether the learned Commissioner was of the view that the contracts of sale made in Calcutta on behalf of the assessees were sales within the meaning of sub-section (12) of Section 2 or whether they were sales with- in the meaning of the Explanation thereto, or under both. Dr. Gupta who appeared for the State of Assam was conscious of this difficulty, for, he was conscious of the fact that Prima facie the sales in question cannot be brought within the Explanation to sub-section (12) of Section 2 of the Act in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s within the meaning of sub-section (12) of Section 2 of the Act? The answer to this question depends upon the answer to another question, namely,-where did property in the goods pass to the buyers?-a question which must be answered in conformity with the principles or rules con- tained in Chapter III of the Indian Sale of Goods Act, 1930. As we have said, Dr. Gupta did not dispute the fact that the contracts of sale in dispute were contracts for the sale of unascertained goods or future goods by description. There is no dispute as to the interpretation of Section 18 of the Indian Sale of Goods Act. It is not disputed that when there is a contract of sale for unascertained goods and the goods are subsequently ascertained, the property in the goods does not necessarily pass when the goods are ascertained. Whether, upon the ascertainment of the goods, property in them is transferred to the buyer, is a question of fact which has still to be decided in accordance with the principle contained in Sec- tion 19(1) of the Sale of Goods Act, 1930, which says "where there is a contract for the sale of specific or ascertained goods, the property in them is transferred to the buyer at such time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ptance or payment of the bill of exchange, the buyer is bound to return the bill of lading if he does not honour the bill of exchange and if he wrongfully retains the bill of lading the pro- perty in the goods does not pass to him." According to Dr. Gupta, there was unconditional appropriation of the goods to the contracts by the sellers with the implied assent of the buyers. When it was pointed out to Dr. Gupta that it was not reasonable to make use of any implied assent of the buyers within the meaning of Section 23(1) in view of the fact that at no stage did the buyers and the sellers come into personal or vicarious contact, the contracts having been made through the agency of a broker, he contended that by reason of the fact that the buyers had agreed to the term that the goods were to be made over by the sellers to a carrier, they gave an implied assent to the uncon- ditional appropriation the moment the sellers made over the goods to a carrier in Assam, thereby transferring property in the goods to the buyers. In other words, Dr. Gupta's contention was that where a seller makes over the goods to a carrier in terms of the contract as to carriage as distinct from delivery not o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be deemed to be unconditional appropriation within the meaning of sub- section (2) of Section 23 of the Indian Sale of Goods Act. The term as to delivery in the contract, namely, that the goods were to be delivered at the buyers' mills or their godowns was still a live condition as to delivery to be fulfilled in Calcutta when the goods were made over by the sellers to a carrier in Assam. The reservation of the liability of the sellers to give delivery of the goods at the buyers' mill or godown in Calcutta in pursuance of the contract is, in our opinion, fatal to the contention of the State of Assam that property in the goods had passed to the buyers in Assam, and that the sellers had parted with the right of disposal of the goods when they made over the goods to a carrier in Assam for transmission to the buyers. So far as sub-section (1) of Section 25 of the Act is concerned, we think it assits the assessees, for, when the goods were appropriated to the contract by the sellers making them over to a carrier in Assam for trans- mission to the buyers, the concurrent conditions as to delivery and pay- ment of the price, as provided for in the contracts, were live conditions, and u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 23(1) nor Sec- tion 23 (2) of the Indian Sale of Goods Act applies. The case reported in Deo Raj v. Munshi Ram(1), therefore, has no application to the facts before us. For the same reasons, we think the case reported in Clive Jute Mills Co. v. Ebrahim Arab(2) has no application, the decision being based upon unconditional appropriation in accordance with Section 83 of the Indian Contract Act. In Juggernath v. E.A. Smith(3), the term as to delivery in the contract was that the goods were to be placed free along. side S.S. Uganda in the river Hooghly. In pursuance of this contract, the goods were placed alongside S.S. Uganda in the river Hooghly and they were subsequently taken on board the vessel. The plaintiffs (sellers) had obtained mate's receipt for the consignment, which they presented, together with their bill for Rs. 46,000, the price of the goods, to the defendants (buyers). The buyers kept the bill and mate's receipt for examination, and afterwards, without paying for the goods, obtained from (1) (1926) I.L.R. 48 All. 622. (3) (1906) I.L.R. 33 Cal. 547. (2) (1897) I.L.R. 24 Cal. 177. Messrs. Mackinnon Mackenzie Co., the agents of the steamer Uganda, the bills of ladi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sale of Goods Act, 1930; this reservation of the right to cancel the contract or the exercise of option as it is described in the contracts, negatives the contention of the State of Assam that the sellers transferred property in the goods in Assam to the buyers when the goods were put on board the river steamer in Assam. We think Dr. Paul's contention is well founded. In the case before us, as the concurrent conditions, namely, the payment of 90% of the (1) (1906) I.L.R. 33 Cal. 547. value of the goods against delivery of documents, were to be fulfilled simultaneously at Calcutta, it is futile to contend that the sellers had transferred property in the goods to the buyers in Assam, when they made over the goods to a carrier in Assam, for the sellers did not deliver the goods to the carrier in pursuance of the contract as to delivery, namely, delivery of the goods to the buyers at the buyers' mills or godowns in Calcutta. We think, in a given contract, there cannot be two distinct deliveries. Delivery in pursuance of the contract as to delivery may be made in different stages, but it is nevertheless one delivery made in different stages, in pursuance of the contract as to delivery. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any place in British India but passed only in London where the bills of exchange were accepted and the delivery of the bills of lading was obtained from the E.B. Ltd., London. Therefore, the profits from sales arose outside British India in London." This decision mani- festly turns upon the consequence of the performance of the two main conditions involved in a contract of sale, namely, delivery and payment of price. In Hoekim Seing v. Maung Ba Chit(3) the facts were these: There were contracts for the purchase of a specific quantity of paddy stored in godowns made by bought and sold notes in which the sale price was entered. The intention of the parties as to the time when the property was to pass was not expressed in the contracts. Earnest money was paid and part payments of the price were made and, when the balance of the purchase price was paid, an entry of its receipt was made in the sold notes. On these facts, it was held that, in the circumstances of the case, the property was intended to pass on the payment of the balance. Their Lordships of the Privy Council observed: "The rules embodied in Sections 20 to 24 of the Sale of Goods Act are rules for ascertaining the prima f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, is that the assessments made under sub-section (4) of Section 17 of the Assam Sales Tax Act of 1947 were legal, but as the contracts of sale relating to the consignments did not constitute "sales" for the purposes of the Assam Sales Tax Act of 1947, the assessees were not liable to be assessed. Dr. Gupta for the State of Assam urged that we should make it clear by our order that the question, whether the contracts of sales covered by the despatches constitute sales within the meaning of the Explanation to sub-section (12) of Section 2 of the Act, is left undetermined by our answers to the questions referred to us, and that it is open to the State Government hereafter to assess the assessees on such contracts as can properly come within the purview of the Explanation to sub-section (12) of Section 2 of the Act. We have already stated in the earlier part of our judgment that we have not before us material upon which we can come to the conclusion that the contracts of sale involved in this reference can be deemed to be sales within the meaning of the Explanation to sub-section (12) of Section 2 of the Act. Whether if and when the authorities have material before them upon which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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