Hire-purchase transactions are not sales in law, and writ relief can restrain recovery of an ultra vires tax levy.

A hire-purchase arrangement in which property passes only on exercise of an option to buy was held not to be a sale in the legal sense of "sale of goods"; the taxing Legislature could not expand the constitutional meaning of sale by deeming such transactions taxable, so the sales-tax levy was unsustainable. Where recovery was threatened on a levy alleged to be without constitutional or legal authority, writ jurisdiction under Article 226 remained available, and the assessee was not required to await recovery proceedings. The demand on the hire-purchase transactions was therefore not enforceable, and recovery was restrained.

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Issues: (i) Whether a hire-purchase transaction, where property passes only on exercise of an option to purchase, could be treated as a "sale" by a deeming explanation for the purpose of sales tax; (ii) whether the assessee could invoke writ jurisdiction under Article 226 to restrain recovery of tax alleged to be without authority of law.

Issue (i): Whether a hire-purchase transaction, where property passes only on exercise of an option to purchase, could be treated as a "sale" by a deeming explanation for the purpose of sales tax.

Analysis: The expression "sale of goods" in the constitutional entry was construed in its legal sense as understood in the law of sale of goods, requiring a completed sale with transfer of property. A hire-purchase arrangement, under which the hirer has only an option to buy and may determine the contract before exercising that option, was held not to be a sale. The Legislature could not, by an enlarged definition in a taxing statute, extend its taxing power beyond the constitutional entry. The deeming explanation therefore attempted to tax what was not a sale in law.

Conclusion: The deeming provision treating hire-purchase transfers as sales was held ultra vires to that extent, and the levy was not sustainable against the assessee.

Issue (ii): Whether the assessee could invoke writ jurisdiction under Article 226 to restrain recovery of tax alleged to be without authority of law.

Analysis: Where the threatened recovery is founded on a tax levied without constitutional or legal authority, the existence of a statutory machinery does not bar recourse to writ jurisdiction. A citizen need not wait for recovery proceedings to conclude where the levy itself is challenged as ultra vires and infringement of legal rights is shown.

Conclusion: The petition under Article 226 was maintainable.

Final Conclusion: The sales-tax demand on the hire-purchase transactions could not be sustained, and the State was restrained from enforcing recovery against the assessee.

Ratio Decidendi: A taxing Legislature cannot enlarge the constitutional meaning of "sale of goods" so as to include a hire-purchase transaction in which property passes only upon exercise of an option to purchase, and a writ lies to restrain recovery of a tax levied without authority of law.

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