Transfer of property in goods must be proved to sustain sales tax on disputed turnover.

Sales tax liability under the Madras General Sales Tax Act arose only on proof of an actual sale involving transfer of property in goods. The evidence showed advances to a mill, earmarking of sugar against those advances, and dispatch to named persons on instructions, but it did not establish that title first passed to the assessee and then to the ultimate purchasers. Mere appropriation by the seller did not transfer ownership without assent to that appropriation. As the department failed to prove two distinct sales, and the circumstances were equally consistent with the assessee acting as financier or commission agent, the disputed turnover was not taxable.

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Issues: Whether the disputed turnover represented sales by the assessee so as to attract liability to sales tax under the Madras General Sales Tax Act.

Analysis: Liability to sales tax arose only if there was an actual sale involving transfer of property in goods. The evidence showed advances made to the Madura Mills, setting apart of sugar against those advances, and despatch of goods to named persons on instructions, but it did not establish that the property in the sugar first passed to the assessee and then from the assessee to the ultimate purchasers. Under the law of sale of goods, mere appropriation by the seller did not by itself transfer title; assent to the appropriation was necessary. The department failed to prove two distinct sales, and the circumstances were equally consistent with the assessee acting as a financier or commission agent for the ultimate purchasers.

Conclusion: The disputed amount was not proved to be the assessee's taxable turnover, and the assessment to sales tax on that amount could not stand.

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