Taxable sale requires transfer of property for consideration; wage conversion and business reconstitution were not sales.

Silver bullion supplied to Kumbakonam manufacturers was treated as raw material delivered for conversion on wages, with adjustments made only by weight and no cash price or transfer of property for consideration; the arrangement was therefore a bailment, not a sale, and no sales tax was attracted. Handing over branch business assets and liabilities to a newly constituted partnership also did not amount to a sale, because the deed showed no transfer of proprietary interest in the assets and the arrangement was only an internal reconstitution without consideration. The governing principle stated is that a taxable sale exists only where property in goods passes for consideration.

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Issues: (i) Whether supplies of silver bullion to Kumbakonam manufacturers constituted sales liable to sales tax; (ii) Whether the handing over of the branch business assets and liabilities to a newly constituted partnership amounted to a sale includible in the turnover.

Issue (i): Whether supplies of silver bullion to Kumbakonam manufacturers constituted sales liable to sales tax

Analysis: The account books showed that silver was supplied and adjusted only in terms of weight, with no debit of any cash price and no conversion of balances into monetary terms. The manufacturers were treated as recipients of raw material for conversion into finished articles for wages. On these facts, there was no transfer of property in the silver for consideration. The relationship was that of bailor and bailee, not vendor and purchaser.

Conclusion: The transactions were not sales and were not liable to sales tax.

Issue (ii): Whether the handing over of the branch business assets and liabilities to a newly constituted partnership amounted to a sale includible in the turnover

Analysis: The new partner was introduced only in respect of the silver branch business, and the deed showed that he had no proprietary interest in the firm's assets, being concerned only with profits and losses. Even on the assumption that the new partnership was a distinct entity, the arrangement did not involve a transfer of goods for consideration in the course of business. A transfer by the partners to themselves could not amount to a sale within the statutory definition.

Conclusion: The transaction did not constitute a sale and the amount was wrongly included in turnover.

Final Conclusion: The assessee succeeded on the substantial tax issues decided in the appeals, and the impugned sales tax demands could not be sustained.

Ratio Decidendi: A transaction is a sale only where property in goods passes for consideration; mere supply of materials for conversion on wages, or internal reconstitution of a business without such passing of property, does not amount to a taxable sale.

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