9911796707
TMI Blog1973 (7) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 per cent under the Act. The assessees however objected to the said proposal stating that the supply of beedi leaves to the contractors cannot amount to a sale, that, in fact, the supply was made along with the tobacco mixture for the purpose of rolling them into beedies, and that though in the contract between the assessees and the contractors, they referred to the supplies of beedies as one of sale, there was in fact no sale at all. The assessing authority, however, overruled the objection and proceeded to assess the said disputed turnover on the ground that there was actually a sale of beedi leaves and thread by the assessees to the contractors. The Appellate Assistant Commissioner also upheld the order of the assessing authority in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no contract at all, but the only fact which was relied on by the revenue there was the debit entries made against the contractors for the value of the beedi leaves, etc., but that, in this case, the nature of the transaction between the assessees and the contractor has to be decided by the terms of the contract entered into by them, and that contract makes it quite clear that what the parties contemplated was an outright sale of beedi leaves as well as thread. The learned Government Pleader invites our attention to clause (1) of the agreement which is as follows: "(1) I shall purchase tobacco, beedi leaves and thread from you and I shall pay for it at the ruling rate as fixed by you and for every maund of tobacco got from you I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedies so manufactured to anyone other than the assessees. If there is any breach of the terms of the agreement by the contractor, he is made liable for damages for breach of the trust as well as breach of the contract. All the terms of the agreement read as a whole suggest that though the transaction of supply of tobacco, beedi leaves and thread is notionally shown as a sale by the assessees to the contractor, it has not really been treated as an outright sale. It has been treated notionally as a sale for a limited purpose of making debit entries for the value of tobacco, beedi leaves, thread, etc., supplied by the assessees to the contractor at the market price. Taking the entire bargain between the parties, we are not in a position to sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout reference to other relevant facts relating to the elements that go to make up a sale of goods, the impugned orders are liable to be quashed. So far as the first category of transactions is concerned, the assessing authority should find out whether apart from the use of the word 'sale' in the account books in the context of debiting the cost of materials supplied, there was transfer of property in the goods under an agreement for a price paid or promised therefor." In this case we are not able to find any material apart from clause (1) of the agreement referred to above to suggest that there was any transfer of property in the goods under an agreement for a price paid or promised therefor. The fact that the cost of the materials suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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