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TMI Blog1992 (9) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... n transaction and levied sales tax on the said turnover. The petitioner preferred an appeal before the Assistant Commissioner who by annexure B order dismissed the appeal. A further appeal was preferred before the Sales Tax Appellate Tribunal which also was dismissed by annexure C. This revision is directed against the said order. 2.. According to the petitioner the transaction in question since is not a "sale" within the meaning of the Kerala General Sales Tax Act, 1963 (Act 15 of 1963) (for short "the KGST Act") the said amount is not exigible to sales tax. It was contended by the learned counsel for the revision petitioner, the view of the appellate authority that there was transfer of property in goods from the appellant to M/s. Vimala Packaging Industries for valuable consideration in the form of deferred payment is not correct either on facts or law. It was maintained by the learned counsel that inasmuch as the goods were given as loan to a sister concern of the revision-petitioner and the said goods were returned, the same as per law cannot amount to sale. According to the learned counsel, since the transaction is only loan the same cannot be sale for the purpose of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " still holds good. In paragraph 16 of the said decision it is stated (page 365 of STC; 567 of AIR) "Thus, according to the law both of England and of India, in order to constitute a sale it is necessary that there should be an agreement between the parties for the purpose of transferring title to goods, which of course presupposes capacity to contract, that it must be supported by money consideration, and that as a result of the transaction property must actually pass in the goods ...... So also if the consideration for the transfer was not money but other valuable consideration, it may then be exchange or barter but not a sale. And if under the contract of sale, title to the goods has not passed, then there is an agreement to sell and not a completed sale". And in the decision in Commissioner of Income-tax v. Motors & General Stores (P) Ltd. [1967] 66 ITR 692 (SC); AIR 1968 SC 200 the difference between "sale" and "exchange " stated in chitty on contracts 22nd Edition, Volume II, page 582 is quoted with approval. The same reads: "The difference between a sale and an exchange is thus, that in the former the price is paid in money, whilst in the latter it is paid in goods by way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t one significant factor to be noted is, there the Textile Commissioner permitted the borrowing as cotton imported under actual user's licence could not be sold. The said decision is distinguishable inasmuch as there could have been no valid sale at all as the subject-matter of the transaction could not be sold. 9.. The decision in Sri Rani Lakshmi Ginning, Spinning and Weaving Mills Private Ltd.'s case [1981] 48 STC 406 (Mad.) brings out that when goods are obtained unless there is payment of money as consideration the transaction cannot be sale. Now the pertinent and important question for consideration in the context is whether "other valuable consideration" can have a meaning to include anything valuable-which need not be money. Learned Government Pleader maintained, there need not be simultaneous payment of cash on delivery of goods to constitute sale; according to him it could as well be "deferred payment or other valuable consideration. Learned Government Pleader relied on the decision in Vadivel Achari v. Madras Sales Tax Appellate Tribunal [1969] 23 STC 273. In that case the Madras High Court considered the question whether payment by gold be "other valuable consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on" takes colour from the preceding expression cash or deferred payment. Thus to constitute "sale" within the meaning of the KGST Act, the same should be for consideration either in cash or deferred payment, or other valuable consideration; and other valuable consideration in the context must be interpreted to mean cheques, bills of exchange or any such negotiable instruments. 12.. The question now for consideration is whether the transaction in question is sale, so that the value of the goods could be treated as taxable turnover. The order, annexure C, itself states that both the petitioner as well as M/s. Vimala Packaging Industries, Umayanalloor, are engaged in the business of manufacturing and sale of paper cartons and duplex boxes. The purchase account showed that the goods worth Rs. 1,00,000 was returned along with interest of Rs. 15,000. The interest also was credited to the paper purchase account, but there was no decrease in physical stock of goods in the books maintained by M/s. Vimala Packaging Industries, Umayanalloor. 13.. The thrust of the argument by the learned Government Pleader is, payment of Rs. 15,000 as interest in the facts and circumstances would show that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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