Unascertained goods and statutory definition of goods controlled the tax outcome; property passed only on unconditional appropriation.

An agreement to supply sawar logs from an undefined area was treated as one for unascertained or future goods, because no specific logs were identified at the time of contracting and no separate implied contract arose for each consignment when the logs were railed. Property in such goods passed only on unconditional appropriation, which occurred at Ambernath after the buyer's inspection and right of rejection, not on delivery to the railway. In the tax context, the Sales Tax Act's own definition of "goods" controlled, and the wider Sale of Goods Act definition could not be imported to enlarge Explanation II to section 2(g). The transactions were therefore not taxable sales under the Act.

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Issues: (i) Whether the agreement was for specific or ascertained goods, or for unascertained or future goods, and whether any implied contract arose each time the logs were railed. (ii) When the property in the logs passed to the buyer. (iii) Whether the definition of "goods" in the Sale of Goods Act could be used for Explanation II to section 2(g) of the Sales Tax Act, and whether the sales were liable to tax under the Act.

Issue (i): Whether the agreement was for specific or ascertained goods, or for unascertained or future goods, and whether any implied contract arose each time the logs were railed.

Analysis: The agreement did not identify any specific logs at the time of contracting. The supply was to be made from a wide and undefined area, and the seller could furnish logs answering the description from anywhere within that area. The logs were therefore not ascertained on the date of the agreement. The conduct of sorting and railing the goods in the presence of the buyer's representative did not create a separate binding implied contract for each consignment.

Conclusion: The agreement was an express agreement to sell sawar logs, but the goods were unascertained or future goods, and there was no separate implied contract for each consignment.

Issue (ii): When the property in the logs passed to the buyer.

Analysis: For unascertained or future goods, property passes only upon unconditional appropriation to the contract. Here, the buyer reserved the right to reject the goods at Ambernath after inspection, so the appropriation at the rail head was not unconditional. The buyer's assent and final appropriation occurred only at Ambernath.

Conclusion: The property in the logs passed at Ambernath when the goods were appropriated by the buyer to the contract, and not on delivery to the railway.

Issue (iii): Whether the definition of "goods" in the Sale of Goods Act could be used for Explanation II to section 2(g) of the Sales Tax Act, and whether the sales were liable to tax under the Act.

Analysis: The Sales Tax Act contains its own definition of "goods", and that definition governs taxability under the Act. The wider definition in the Sale of Goods Act cannot be imported into Explanation II so as to enlarge the taxing provision. Since the standing trees were not "goods" within the meaning of the Sales Tax Act, the deeming fiction in Explanation II did not apply.

Conclusion: The Sale of Goods Act definition could not be applied to Explanation II, and the transactions were not sales taxable under the Sales Tax Act.

Final Conclusion: The reference was answered in favour of the assessee. The transactions were held not to be taxable sales under the Act, and the assessee was entitled to costs.

Ratio Decidendi: For a taxing statute, the Act's own definition of "goods" must control, and a deeming provision cannot be enlarged by importing a wider definition from another enactment; property in unascertained goods passes only on unconditional appropriation to the contract.

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