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TMI Blog1966 (9) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... (Rs. 1,80,000 for ornaments and Rs. 2,00,000 for bullion). Against this order both the department and the assessee went up in revision. According to the department the small reduction in the gross turnover was unjustified. On the other hand, the assessee reiterated its contention that on the facts found by the judge (Appeals) that obtaining new ornaments by giving in exchange bullion from his own stock plus manufacturing charges to the goldsmiths did not amount to a sale of bullion and as such that part of the transaction was not liable to sales tax and the judge (Appeals) had erred in treating the bullion so given in exchange for the ornaments as suppression of sales of bullion. The Judge (Revisions) rejected the appeal of the department, and accepting the contention and appeal of the assessee, reduced the turnover of bullion by Rs. 1,40,000. Hence, this reference at the instance of the Commissioner under section 11(1) of the Act. Mr. Raja Ram Agarwal, learned junior Standing Counsel contends, that in the circumstances of the case, bullion given in exchange for gold ornaments manufactured by Sunars was a "sale" by the assessee and even if it was only an "exchange" or "barter" it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequent decision of the Supreme Court in the State of Madras v. Gannon Dunkerley Co., Madras[1958] 9 S.T.C. 353. In that case the vires of the words "other valuable consideration" contained in the definition of "sale" in the Madras General Sales Tax Act came up for consideration. After tracing the evolution of the law relating to the sale of goods from Roman Law to the time of the promulgation of the Indian Sale of Goods Act, 1930, and the coming into existence of the Constitution of India, it was held: "A power to enact a law with respect to tax on sale of goods under Entry 48 (in List II, Government of India Act, 1935) must, to be intra vires, be one relating in fact to sale of goods and, accordingly, the Provincial Legislature cannot, in the purported exercise of its power to tax sales, tax transactions which are not sales by merely enacting that they shall be deemed to be sales....." "Sales tax was not a subject which came into vogue after the Government of India Act, 1935. It was known to the framers of that statute and they made express provision for it under Entry 48. Then it becomes merely a question of interpreting the words, and on the principle, already stated, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the same result in the business sense can be secured by two different legal transactions one of which may attract tax and the other, not. This is no justification for saying that a taxpayer who has adopted a method which attracts tax is to be treated as though he had chosen a method or device different from the other." That principle however has no application to the facts of the present case, where the character and nature of the transaction, whether the gold was given prior or after the manufacture of the ornaments, remained the same. The transaction would not be a sale within the meaning of section 2(h) of the Act. Such an interpretation may prevent the department from obtaining sales tax from the assessee twice over on the same quantity of gold or bullion, i.e., when it exchanges it for equivalent weight of gold ornaments and again when the gold ornaments are sold by it, but that cannot be helped in view of the law as it stands. For the reasons given above, the question is answered by saying that the transaction was not a sale but only exchange or barter, and, therefore, did not fall to be assessed within the meaning of section 2(h) of the Act. The department will pay th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State of RajasthanA.I.R. 1963 S.C. 1638. and Corporation of Calcutta v. Liberty CinemaA.I.R. 1965 S.C. 1107.). Mr. Agarwal contended that since the definition of "sale" 'in section 2(h) of the Act covers a transfer of property for cash as well as for "other valuable consideration" it must include such consideration as gold which was "readily convertible into cash" and was as good as cash. He went on to argue that such a meaning given to the term "sale" found in section 2(h) of the Act was within the scope of the definition of "sale" in the Sale of Goods Act. The argument involves the addition of some explanatory words after "other valuable consideration" such as: which is readily convertible into cash. We cannot add to or insert or read words into the statutory provision which may make the concept of sale wide enough to include barter pure and simple. The only reasonable way of interpreting section 2(h) of the Act, without adopting a construction which may affect the constitutional validity of the definition, as it stands, is to construe the words "other valuable consideration" ejusdem generis if that is possible. We have, therefore, to consider whether the ejusdem generis rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e inference that such transactions which are beyond the purview of a "sale", as it is ordinarily understood in law, must be meant to be included here. Mr. Agarwal tried to draw our attention to the varying definitions of the term "sale " given in particular enactments in England. We are, however, not concerned here with any enactment where the term "sale" may have a peculiar meaning for the purposes of that particular enactment. We are concerned with a rather general taxing statute which purports to deal with sales in their ordinary legal sense and which does not seem to go beyond that. The general legal conception of a sale is that of "a transmutation of a property of a right from one man to another in consideration of a sum of money as opposed to barters, exchanges and gifts": (See Gill v. Eagleston187 N.W.P. 871., quoted at page 58 in "Words and Phrases", Vol. 38, West Publishing Co.). The term "money" has also a legal meaning as well as a popular sense both of which bar the inclusion of bullion or metal of any kind as such in the concept of "money". After all, we are not concerned with what may pass for money in exceptional conditions or under the special usages and customs of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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