Partnership property dealings among identical partners are not a sale where no distinct transferor and transferee exist.

Two partnership firms with identical partners are not separate persons for the purpose of a sale merely because their profit-sharing ratios differ. A firm has no legal existence distinct from the partners constituting it, and partnership property is held jointly during the subsistence of the partnership. As no partner has a specific separate share in a particular asset, dealings in that property between the same group of partners do not amount to a transfer from one person to another. The transaction was therefore not a sale and was not liable to sales tax.

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Issues: Whether transfer of goods between two partnership firms having identical partners, but different profit-sharing ratios, constituted a sale liable to sales tax.

Analysis: A firm has no legal existence distinct from the partners who constitute it. During the subsistence of the partnership, the partners hold the partnership property jointly, and no partner can be treated as having a specific separate share in a particular asset so as to make inter-firm dealings between the same group of partners a transfer between different persons. The difference in profit-sharing ratios affects only the distribution of profits and losses, not the ownership character of the partnership assets at the stage of dealing with them. Since a sale requires a transfer of property by one person to another, the transaction in substance was the same group of partners dealing with property belonging to themselves.

Conclusion: The transfer was not a sale and was not liable to sales tax.

Ratio Decidendi: A transaction between two partnership firms comprising the same partners does not amount to a sale unless there are in law two different persons as transferor and transferee; differing profit-sharing ratios do not create such distinct persons for the purpose of sale.

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