Deferred sales tax on instalments depends on passing of property where no physical delivery occurs.

Sales tax under section 86 of the Special War Revenue Act was payable on deferred instalments only where the statutory conditions for deemed delivery were met. The provision's first proviso created a notional delivery for certain instalment arrangements, but the second proviso governed cases with no physical delivery and made tax payable only when property passed to the purchaser. Because there was neither physical delivery nor any passing of property, the second proviso applied and displaced the first. The unpaid instalments were therefore not subject to sales tax, and the claim failed.

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Issues: Whether sales tax under section 86 of the Special War Revenue Act was payable on unpaid instalments of the contract price where there was no physical delivery of the goods and the property in the goods never passed to the purchaser.

Analysis: The tax provision imposed sales tax generally at the time of delivery, but its first proviso dealt with deferred or instalment arrangements by creating a notional delivery in specified cases. The second proviso, however, expressly applied where there was no physical delivery and provided that the tax became payable only when property passed to the purchaser. On the facts, there was no physical delivery and the property never passed. That proviso therefore controlled the case and displaced any reliance on the first proviso.

Conclusion: The tax was not payable on the unpaid instalments, and the claim failed.

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