Sale character in varnish contracts depends on transfer of property for consideration, not on invoicing details or buyer-supplied materials.

Where the substance of a varnish contract shows transfer of property in finished varnish for valuable consideration in the course of business, the transaction is a sale for sales tax purposes. The supplier's use of some raw materials by the buyer, or the fact that invoices did not separately show their value, did not change the character of the transaction. The omission of part of the value from the earlier seller's return likewise did not prevent the transaction from being treated as a sale under section 2(h). On the materials produced, the burden under section 10 was satisfied, and the turnover could be treated as second sales eligible for the statutory concession.

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Issues: Whether the transaction under the varnish contract between the petitioners and the manufacturer was a sale of varnish so as to amount to a second sale in the hands of the petitioners and entitle them to deduction from assessable turnover.

Analysis: The contract, invoices, gate passes, and the course of conduct between the parties showed a transfer of property in finished varnish for valuable consideration in the course of business. The fact that the petitioners supplied some raw materials and that the invoices did not separately include their value did not alter the character of the transaction. A transaction does not cease to be a sale merely because the returned turnover of the earlier seller may have omitted part of the value of the goods, and the essential ingredients of a sale under section 2(h) were satisfied. The burden under section 10 stood discharged on the materials placed before the Court.

Conclusion: The transaction was a sale, the goods had already suffered tax at the first sale in the hands of the manufacturer, and the petitioners were entitled to treat their turnover as second sales and claim the statutory concession.

Ratio Decidendi: Where the substance of the transaction shows transfer of property in finished goods for consideration in the course of business, the transaction is a sale for sales tax purposes notwithstanding that the buyer supplied some materials or that the earlier seller's return did not include the full value of all inputs.

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