Case Summary: Vishnu Agencies (Pvt.) Ltd. v. Commercial Tax Officer and Others (1977) 12 SC CK 0019
Case Stats:
Name of the Court: Supreme Court of India
Case No.: Civil Appeal No. 724 of 1976
Date of Decision: 16-12-1977
Bench: Full Bench – Beg, C.J.; Untwalia, J.; Krishna Iyer, J.; Kailasam, J.; Hidayatullah, J.; Fazal Ali, J.; Chandrachud, J.; Bhagwati, J.
Final Decision: Disposed Of
Citations: (1978) 7 CTR 89(2)
Acts Referred: Constitution of India – Article 32; Contract Act, 1872 – Sections 10, 13, 14, 15; Essential Commodities Act, 1955 – Sections 5, 6A, 7; Sales of Goods Act, 1930 – Section 4
[Judgment Source]
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Facts of the Case
The case arose from transactions involving the supply of cement under the West Bengal Cement Control Act, 1948 and the Cement Control Order, 1948. The appellants, licensed stockists of cement, supplied cement to allottees at controlled prices as per government allotment orders. The Commercial Tax Officer levied sales tax on these transactions. The appellants contended that such transactions were 'compulsory sales' lacking mutual consent and therefore not 'sales' within the meaning of the Sales Tax Act. The Calcutta High Court Division Bench upheld the tax, leading to the present appeal.
Law Points Raised
1. Whether transactions carried out under government allotment orders at controlled prices constitute 'sales' under the Sales Tax Act.
2. Whether the absence of mutual consent or bargaining negates the existence of a sale under Section 4 of the Sale of Goods Act.
3. Legislative competence to define such transactions as sales.
4. Applicability of similar principles to Andhra Pradesh Paddy Procurement (Levy) Orders.
Acts / Provisions / Articles Referred
• Constitution of India: Article 32
• Contract Act, 1872: Sections 10, 13, 14, 15
• Essential Commodities Act, 1955: Sections 5, 6A, 7
• Sales of Goods Act, 1930: Section 4
• West Bengal Cement Control Act, 1948 & Cement Control Order, 1948
Judgements Referred
• New India Sugar Mills Ltd. v. Commissioner of Sales Tax
• Precedents under the Andhra Pradesh Paddy Procurement (Levy) Orders
Obiter Dicta
The Court recognized that control orders regulate but do not necessarily negate consensual agreements; statutory compulsion regarding price, quantity, and parties does not exclude the concept of 'sale' if transfer of property in goods for consideration takes place.
Ratio Decidendi
Transactions pursuant to statutory orders, where property in goods is transferred for consideration, constitute 'sales' under sales tax laws, even if parties have no freedom to negotiate terms.
Final Ruling
The Supreme Court upheld the imposition of sales tax on such transactions. Controlled supply arrangements do not remove the essential character of a sale.
Summary
This case clarified that even under statutory compulsion and price control, transactions involving transfer of property in goods for consideration amount to sales for the purposes of sales tax. The decision harmonized the concept of sale under the Sale of Goods Act with the regulatory framework of essential commodities, confirming that controlled sales remain taxable.
[Judgment Source]
https://www.courtkutchehry.com/Judgement/Search/AdvancedV2?docid=267919