Sale under sales tax law applies to cloth supplied by a syndicate to members on payment, treating parties as distinct entities.

Cloth supplied by a syndicate to its members on payment was treated as a sale under the U.P. Sales Tax Act, 1948. Applying section 2(h) to the facts found by the High Court, the transactions were predominantly for cash, there was no element of compulsion, the price matched the retail price, and the syndicate and its members were regarded as distinct entities. The contention that the syndicate and its members formed one entity was not accepted at the appellate stage because there was no adequate factual foundation. The tax treatment therefore followed the existence of a sale.

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Issues: Whether cloth supplied by the syndicate to its members on payment constituted a sale within the meaning of the U.P. Sales Tax Act, 1948.

Analysis: The relevant definition of sale in section 2(h) of the U.P. Sales Tax Act, 1948 was applied to the facts found by the High Court. The transactions were predominantly for cash, there was no element of compulsion, the price charged was the same as that at which the cloth was being sold to retailers, and the syndicate and its members were treated as distinct entities. The plea that the syndicate and its members were one entity was not entertained at the appellate stage for want of adequate factual foundation.

Conclusion: The cloth supplied to the members on payment was a sale under the Act, and the answer returned against the assessee was .

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