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TMI Blog1954 (6) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... n the form of trees standing on the land in this province at the time of the contract of sale?" 2.. The Board of Revenue refused to refer the vital question regarding the vires of Explanation 11 to section 2(g) of the Act in view of the decision of this Court in Shriram Gulabdas v. Board of Revenue, Madhya Pradesh(1), and the assessee has not moved this Court to require the Board of Revenue to refer this question for decision. 3.. The assessee disputes his assessment to sales tax on the sale of logs of sawar wood supplied by him during the period from 1st June, 1947, to 12th November, 1947, to the Western India Match Company, Limited (hereinafter referred to as the company) at Ambernath in the State of Bombay. These logs were supplied on terms similar to those of the written statement dated 2nd March, 1945, made at Bombay. The date of the agreement for supply during the relevant period is not on (1) [1952] 3 S.T.C. 343; I.L.R. 1953 Nag. 332. record. After specifying the dimensions and the quantity of wood to be supplied, the agreement inter alia provides: (1) that the logs shall be of straight growth and free from twisted or spiral growth, large or dead knots, tracks, shakes, d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore delivery; and consequently in either case Explanation II to section 2(g) of the Act was attracted. It was accepted by the learned President that the contract of sale was made with, and the property in the goods also passed to, the buyer outside the State. 6.. According to Shri Shrivastava it was a contract of sale of specific and ascertained goods and the property in the logs passed to the purchaser as soon as they were delivered to the carrier at the rail heads within the province after sorting them out in the presence of the representative of the company. According to the learned Member "this leads to the inference that the implied contract of sale as evidenced by the conduct of the parties covered specific and ascertained goods. In other words, sawar wood and its consignment from this Province were each time covered or governed by the implied contract of sale." The learned Member was of the view that there was a presumption that the despatches were of ascertained goods in the absence of any evidence that large quantities of logs were rejected at Ambernath. It was also observed: "Clause 6 of the agreement regarding final measurements does not in any way affect the terms o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 18). As regards a contract for the sale of specific or ascertained goods, the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred. For the purpose of ascertaining such intention regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case. Unless a different intention appears, the rules contained in sections 20 to 25 are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer. 8.. We have therefore first to determine whether the contract of sale in the instant case related to specific or ascertained goods or unascertained or future goods. Section 2 of the Sale of Goods Act defines "future goods" and "specific goods". "Future goods" means goods to be manufactured or produced or acquired by the seller after the making of the contract of sale. "Specific goods" means goods, identified and agreed upon at the time a contract of sale is made. The Act necessarily distinguishes specific goods from unascertained goods, i.e., goods defined only by description. The term "specific goods" is not identica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e property in goods passed to the buyer company. Under section 23 of the Sale of Goods Act, where there is a contract for the sale of unascertained or future goods by description and the goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods there- .upon passes to the buyer. Such assent may be express or implied and may be given either before or after the appropriation is made. After sorting the logs with the assent of the buyer's representative, the applicant appropriated the logs to the contract by railing them to the buyer's destination at Ambernath. The statement of the case is silent on the point whether the railway receipts were made out with the company as the consignee. The assent of the representative was provisional and was not binding on the company. Under the agreement it did not agree to unconditionally appropriate the logs to the contract as soon as they were delivered to the railway with the assent of its representative for carriage to Ambernath. It had expressly reserved its right to reject the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the lot passed to the buyer. Therefore, the sales took place at Ambernath each time the goods were appropriated by the buyer to the contract. Point No. 3 is answered accordingly. 14.. It is evident from the long title and preamble of the Act that the object of the Act is to levy a tax on the sale of goods in Madhya Pradesh. The question for consideration therefore is what element or elements have been accepted by the Act as constituting a sale within this State. In the main definition of sale in section 2(g) of the Act stress is laid on the element of transfer of property in goods and the payment or promise of payment of price or other valuable consideration and on no other. If that was the whole definition of sale, it is manifest that the sales in the instant case, having taken place outside the State, are not liable to tax under the Act: Poppatlal Shah v. The State of Madras(1). 15.. The course of business in Poppatlal's case' which was actually followed during the period for which assessment was sought to be made was as follows: The assessee firm received orders in its Madras head office from Calcutta merchants for supply of articles. These articles were purchased in the loc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act is much wider than that in the former. Under the former Act "'goods' means all kinds of movable property other than actionable claims, stocks, shares or securities and includes all materials, articles and commodities, whether or not to be used in the construction, fitting out, improvement or repair of immovable property". Under the Sale of Goods Act "'goods' means every kind of movable property other than actionable claims and money and includes stocks and shares, growing crops, grass and things attached to and forming part of the land which are agreed to be severed before sale or under the contract of sale." "Movable property" is not defined by either Act. It is defined in the Central Provinces and Berar General Clauses Act, 1914 (1 of 1914) to mean "property of every description except immovable property", and "immovable property" is defined by that Act to include "land, benefits to arise out of land and things attached to the earth or permanently fastened to any- thing attached to the earth." This definition includes standing timber, growing crops and grass. These are, however, excluded from the definition of "immovable property" under the Indian Registration Act, 1908. Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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