Job work with return of equivalent gold is not a sale under the Bombay Sales Tax Act.

Transactions in which ornaments were made from the dealers' own gold, with equivalent gold later returned by customers, were treated as job work rather than sales under the Bombay Sales Tax Act, 1953. The decisive factors were that only majuri or labour was charged, accounts were maintained in gold weight, no sale price was fixed or billed, and the gold was not treated as sold goods. As the arrangement involved labour charges and return of equivalent gold without transfer for price or valuable consideration, it did not constitute a sale. On that basis, the dealers could not be treated as dealers for these transactions.

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Issues: (i) Whether the transactions by which ornaments were made from the dealers' own gold and the equivalent gold was later received back from customers amounted to sales within section 2(13) of the Bombay Sales Tax Act, 1953. (ii) If the transactions were sales, whether the respondents were dealers within section 2(6) of the Bombay Sales Tax Act, 1953.

Issue (i): Whether the transactions by which ornaments were made from the dealers' own gold and the equivalent gold was later received back from customers amounted to sales within section 2(13) of the Bombay Sales Tax Act, 1953.

Analysis: The transactions were found to be part of a consistent trade practice in which the respondents charged only for majuri or labour, kept the accounts in terms of gold weight, made no pricing of the ornaments, raised no bills for any alleged sale price, and did not treat the gold as sold goods. The use of their own gold was treated as an advance to customers, with equivalent gold being returned, and not as consideration for a sale. On those facts, the substance of the dealings was job work and not a transfer of property for price or valuable consideration.

Conclusion: The transactions did not amount to sales.

Issue (ii): If the transactions were sales, whether the respondents were dealers within section 2(6) of the Bombay Sales Tax Act, 1953.

Analysis: This question depended entirely on the first issue. Since the dealings were held not to be sales, the foundation for treating the respondents as dealers for those transactions disappeared.

Conclusion: The respondents were not dealers on the footing of these transactions.

Final Conclusion: The reference was answered against the taxing authority and in favour of the respondents, with costs awarded to the petitioner before the Tribunal reference was concluded.

Ratio Decidendi: Where the parties' real arrangement shows only payment for labour and return of equivalent gold without any agreed sale price or sale account, the transaction is not a sale within the sales tax law.

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