Controlled-price coal supply remained a sale; tax recovery was limited to the period validated by statute.

Contractual supply of coal under a controlled-price arrangement can still amount to a sale where the parties' agreement shows mutual assent, transfer of property in goods and price in money; price control and delivery regulation do not by themselves negate the sale character. The transactions were therefore treated as sales liable to sales tax on that ground. The document also explains that a validation statute can preserve tax liability only for the period it expressly cures: the assessment for the full year could not stand for turnover outside the validated window, and tax recovery was confined to the period covered by the Validation Act.

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Issues: (i) Whether the supply of coal under the Colliery Control Order, 1945 and the parties' agreement amounted to a sale liable to sales tax under the Rajasthan Sales Tax Act, 1954. (ii) Whether the assessment for the full year 1955-56 could stand notwithstanding the Sales Tax Laws Validation Act, 1956, in so far as the turnover between 1 April 1955 and 6 September 1955 was concerned.

Issue (i): Whether the supply of coal under the Colliery Control Order, 1945 and the parties' agreement amounted to a sale liable to sales tax under the Rajasthan Sales Tax Act, 1954.

Analysis: The agreement between the parties created a contractual relationship under which the assessee undertook to supply coal at controlled rates and to arrange delivery. The Control Order regulated the price and mode of supply, but did not destroy the contractual character of the transaction. The essential elements of a contract of sale were present, including competent parties, mutual assent, transfer of property in goods, and price in money. The principle in the decision dealing with compulsory supplies under statutory directions was held inapplicable because the present transactions arose under an agreement of sale and not merely from unilateral compulsion by the Controller.

Conclusion: The supply of coal amounted to a sale and was not exempt from sales tax on that ground.

Issue (ii): Whether the assessment for the full year 1955-56 could stand notwithstanding the Sales Tax Laws Validation Act, 1956, in so far as the turnover between 1 April 1955 and 6 September 1955 was concerned.

Analysis: The sales were held to be inter-State sales within the meaning of Article 286 of the Constitution of India. The Validation Act cured the invalidity only for the period it covered, namely from 1 April 1955 to 6 September 1955. Since the assessment was a composite and indivisible one for the entire year, the Court declined to sustain it in part by direct severance through reassessment, but granted relief by restraining realization of tax except for the validated period and directing modification of the assessment accordingly.

Conclusion: The State could realize sales tax only for the validated period from 1 April 1955 to 6 September 1955, and the assessment had to be modified accordingly.

Final Conclusion: The assessee succeeded on the sale characterisation issue, but the State succeeded to the extent of the validated inter-State sales period, so the appeal was allowed only in part and the assessment was confined to the period covered by the Validation Act.

Ratio Decidendi: Where supply is made under a contract with mutual assent, statutory price control does not by itself negate a sale; and a validation statute may preserve tax liability only for the period and transactions it expressly cures.

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