Sale under trade tax law includes transfer of goods paid by adjustment against an existing liability, not just cash payment.

Adjustment of the price of molasses against licence fee did not prevent the transfer from constituting a sale under the Uttar Pradesh Trade Tax Act, 1948. The Court noted that the statutory definition of sale is inclusive, and Article 366(29A) enlarges the concept for sales tax purposes beyond the classical Sale of Goods Act position. Because the molasses belonged to the transferor, were goods, and were transferred for monetary consideration, the adjustment against an existing liability was treated only as a mode of payment. The arrangement was therefore taxable as a sale, not a barter or exchange.

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Issues: Whether adjustment of the price of molasses against licence fee for use of a sugar mill amounted to a sale within the meaning of the Uttar Pradesh Trade Tax Act, 1948 and was exigible to trade tax.

Analysis: The definition of sale in section 2(h) of the Uttar Pradesh Trade Tax Act, 1948 is inclusive and extends to transfers of property in goods for cash, deferred payment or other valuable consideration. After the Forty-sixth Constitutional Amendment, article 366(29A) of the Constitution of India enlarges the meaning of sale for sales tax purposes, and a transaction may be taxable even if the classical Sale of Goods Act concept is not fully present. On the facts, the molasses belonged to the appellant, was transferred to the company, and the parties had agreed that the value of molasses would be adjusted against the licence fee. The arrangement was not a barter or exchange, because the consideration remained monetary in substance and the adjustment was only a mode of payment. Molasses were goods, and their transfer for such monetary consideration fell within the statutory definition of sale.

Conclusion: The transaction constituted a sale and was liable to trade tax under the Act; the contention that it was merely barter or exchange was rejected.

Ratio Decidendi: Where property in goods is transferred for monetary consideration, the fact that payment is effected by adjustment against an existing liability does not prevent the transaction from being a sale under an expanded sales tax definition.

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