Situs of sale under sales tax law depends on where property passes; contextual reading of "dealer" also upheld.

For Bihar sales tax purposes, the term "dealer" was read in the context of the charging provision and the Act's object of taxing sales in the State, so "supplying" was construed with "selling" rather than as a separate, unrelated category. On the facts, the assessee's business of selling and supplying goods in Bihar brought it within the statutory definition of dealer. The situs of sale was then determined by the place where property in the goods passed under the Sale of Goods Act: transactions where goods were appropriated and delivered to the carrier at Panihati in West Bengal were outside Bihar, while consignments routed through Bhagalpur agents and realised there were treated as Bihar sales and remained taxable.

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Issues: (i) Whether the assessee was a dealer within the meaning of Section 2(c) of the Bihar Sales Tax Act, 1944. (ii) Whether the sales in question were made in Bihar within the meaning of Section 2(g) of the Bihar Sales Tax Act, 1944.

Issue (i): Whether the assessee was a dealer within the meaning of Section 2(c) of the Bihar Sales Tax Act, 1944.

Analysis: The expression "dealer" in the Act was read in the setting of the charging provision and the Act's object of taxing sales in Bihar. The word "supplying" was construed noscitur a sociis with "selling" and was not treated as creating a separate category unrelated to sale. On the facts, the assessee carried on a business of selling and supplying goods in Bihar and had sufficient business activity within the State to fall within the statutory definition.

Conclusion: The question was answered in the affirmative and against the assessee.

Issue (ii): Whether the sales in question were made in Bihar within the meaning of Section 2(g) of the Bihar Sales Tax Act, 1944.

Analysis: Under the Sale of Goods Act, the property passed when the goods were unconditionally appropriated to the contract and delivered to the carrier without reservation of the right of disposal. For transactions with the Bhagalpur Municipality and the Bhagalpur District Board, the goods were appropriated and handed over for carriage at Panihati in West Bengal, so the transfer of property and delivery took place outside Bihar. Those transactions therefore were not taxable in Bihar. Different treatment applied to other consignments where railway receipts were sent to Bhagalpur agents and the price was realised through them, because those transactions constituted sales within Bihar on the found facts.

Conclusion: The question was answered partly in the negative and partly in the affirmative in favour of the assessee to the extent of the Bhagalpur Municipality and Bhagalpur District Board transactions, and in favour of the Revenue for the remaining Bihar sales.

Final Conclusion: The reference was disposed of by holding that the assessee was a dealer, but only the transactions whose property passed in West Bengal escaped Bihar tax, while the remaining Bihar transactions were taxable.

Ratio Decidendi: For sales-tax purposes, the situs of sale is determined by the place where property in the goods passes under the law of sale of goods, and statutory words such as "supplying" are to be read in context with "selling" when the enactment is aimed at taxing sales in Bihar.

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