Consignment arrangement treated as agency, not sale, because title had not passed before ultimate customer sale.

Supplies made under a consignment arrangement were held not to be sales to the company for Bombay sales tax purposes, because the appellants retained a continuing right to recall the goods before sale. The contractual and accounting features pointed to agency rather than transfer of ownership: goods were received on consignment, billing was in the company's name, and the company was required to remit sale proceeds. The Court distinguished commission-sale authorities where the agent dealt in its own right and found no transfer of property on dispatch. The arrangement therefore did not attract liability under the Bombay Sales Tax Act, 1953.

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Issues: Whether the supplies made by the appellants to the company under the consignment arrangement constituted sales attracting liability under the Bombay Sales Tax Act, 1953.

Analysis: The arrangement showed that the company received goods on consignment, with a continuing right in the appellants to recall the goods before sale. The practice between the parties, the absence of any fixed transfer of ownership at the time of dispatch, and the manner in which accounts were maintained indicated that the company acted as a selling agent and not as a purchaser. The Court distinguished the authorities relied upon by the revenue on the ground that those cases involved commission arrangements where the goods were to be sold in the agent's own right, whereas here the right of recall negatived any transfer of property before the ultimate customer sale. The surrounding contractual features, including billing in the company's name and the accounting obligation to remit proceeds, were consistent with an agency arrangement rather than a sale to the company.

Conclusion: The supplies did not amount to sales from the appellants to the company and did not attract the Bombay Sales Tax Act, 1953; the appeal succeeded.

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