Endorsement of delivery orders for unascertained goods is not a taxable sale without transfer of property.

Endorsement and transfer of delivery orders for unascertained goods did not amount to a sale liable to sales tax under the Madras General Sales Tax Act. The charging provision applied only where property in goods had passed from a dealer, and the goods here remained part of a common bulk without specific identification or appropriation to any contract. Under sale of goods principles, title in unascertained goods passes only on unconditional appropriation and separation from the bulk. Until then, a delivery order is merely authority to take delivery, not a document transferring property. As the buyer had not acquired title, the tax assessment could not stand.

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Issues: Whether endorsement and transfer of delivery orders in respect of unascertained goods amounted to a sale of goods liable to sales tax under the Madras General Sales Tax Act.

Analysis: The charging provisions of the Madras General Sales Tax Act applied only where there was a transfer of property in goods by a dealer. The delivery orders related to goods stored in a common stock, and the goods were not separately identified or appropriated to any contract when the delivery orders were issued. Under the rules governing sale of goods, property in unascertained goods passes only when the goods are unconditionally appropriated and separated from the bulk. Until such separation and delivery, the delivery order was no more than authority to take delivery, and not a document of title transferring property in the goods. Since the buyer had not acquired title from the mills, endorsement of the delivery orders to third parties could not operate as a sale of goods.

Conclusion: The transfer of the delivery orders was not a sale of goods within the meaning of the Madras General Sales Tax Act, and the tax assessment could not stand.

Ratio Decidendi: Where goods remain unascertained and no property has passed to the buyer, endorsement of a delivery order does not constitute a sale of goods for sales tax purposes.

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