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TMI Blog1968 (9) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the purchasers on account of the supply of sugar bags. It is further stated that sugar is always sold in that condition and is never sold in bulk or loose, nor is any rebate allowed to a purchaser who may offer to return the gunny bags or to supply his own gunny bags. Previously the turnover of sugar was liable to sales tax both under the U.P. and the Central Sales Tax Acts. By a Notification No. ST/4485/X, dated 14th December, 1957, issued under section 4(1)(b) of the U.P. Sales Tax Act the turnover of certain articles was exempted from levy of sales tax, if additional Central excise duty was leviable on those articles and proof was furnished of the additional excise duty having been paid. Sugar is one of such items upon which the additional Central excise duty was leviable. In respect of the assessment years 1961-62 to 1963-64 regular assessments were made both under the U.P. and the Central Sales Tax Acts exempting the turnover of sugar from payment of tax. No tax was levied on the value of the gunny bags either. Subsequently, proceedings under section 21 of the U.P. Sales Tax Act were taken on the ground that the turnover in respect of gunny bags had escaped assessment. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the duty of the courts to give such relief in fit cases and the courts would be failing to perform their duty if relief is refused without adequate reasons." We have, therefore, to see whether the instant is a fit case for the exercise of jurisdiction under Article 226 of the Constitution, the existence of an alternative remedy notwithstanding. In the instant case, the quantum of tax is not in dispute. The grievance of the petitioner is that there has been no sale of gunny bags as can attract the provisions of either the U.P. or the Central Sales Tax Act. A contention like this, if true, goes to the root of the matter and affects the jurisdiction of the Sales Tax Authorities. The petitioner has averred that appeals were filed before the Assistant Commissioner (judicial) on the ground that there being no sale, the levy of sales tax on the estimated turnover of gunny bags was unauthorised. The Assistant Commissioner (Judicial) rejected the appeals. Thereafter the petitioner filed revision petitions under section 10 of the U.P. Sales Tax Act which are still pending before the Judge (Revisions) Sales Tax. The petitioner made a request to the Judge (Revisions) to stay the recover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow, a contract of sale may not necessarily be express. It may also be implied. In Government of Andhra Pradesh v. Guntur Tobaccos Ltd.[1965] 16 S.T.C. 240., a somewhat similar question arose before the Supreme Court. After reiterating the ingredients of a sale, as mentioned above, it was held that in business transactions the contracts are frequently not recorded in writing setting out all the covenants and conditions thereof, and the terms and incidents of the contracts have to be gathered from the evidence and attendant circumstances. The question in each case would be about the true agreement between the parties and the terms of the agreement would have to be deduced from a review of all the attendant circumstances. It was further held that from the mere passing of title to goods either as integral part of or independent of goods it cannot be inferred that the goods were agreed to be sold, and the price was liable to sales tax. In the instant case it is not disputed that there was no express contract of sale of the gunny bags between the petitioner-company and its customers. There could, of course, be an implied contract. But the existence of an implied contract of this nature h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have looked through the assessment orders to see if there is any material to support the inference that the gunny bags were transferred by the petitioner-company to its customers under an implied contract of sale. It appears that the Sales Tax Officer relied merely upon the judgment of the Additional judge (Revisions), Varanasi Range, passed in the case of Kamla Pati Motilal Sugar Mills and based his decision on the following factors as contained in the aforesaid judgment: "(1) Gunny bags.........items of commercial and marketable commodity. (2) They are included within the definition of 'goods' as defined in section 2(d) of the U.P. Sales Tax Act. (3) There was transfer of property in such goods. (4) The price of gunny bags is deemed to be included in the ex-factory price as prescribed by the Government of India." Obviously the Sales Tax Officer omitted to consider the crucial question as to whether the transfer of property in gunny bags was as a result of any contract of sale either express or implied. In the absence of a finding as to the existence of a contract of sale, there can be no sale in the eye of law. The Sales Tax Officer has placed no material on record point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it cannot be said that the property in the gunny bags was passed by the petitioner-company to its customers for money consideration. As a result of this discussion we find that two important ingredients of a sale as understood in law are missing. Neither any contract of sale has been established nor has it been proved that the property in gunny bags was transferred for money consideration. The finding, rather the assumption, of the Sales Tax Authorities that there was a sale of gunny bags cannot, in the circumstances of the case, be upheld. The result is that the assessment order is without any material and it is well settled that an assessment order without any material can be quashed by a writ of certiorari. It was next urged by the learned Standing Counsel that we should not interfere at this stage and should allow the revision pending before the Judge (Revisions) to be disposed of as the Judge (Revisions) has the power to make further enquiries. We cannot accede to this request. The question as to whether the Judge (Revisions) can make further enquiries so as to bring on record fresh material is of a hypothetical nature so far as the instant case is concerned. The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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