Consignment despatch for sale may constitute a taxable sale when property in goods passes for consideration.

Despatch of goods on consignment basis for sale outside the State was held to amount to a sale for sales tax purposes where the transaction involved transfer of property in goods for consideration. The Court rejected the contrary view that no sale existed merely because the goods were sent through commission agents, and treated the pleadings and assessment record as showing a consistent position that the goods were despatched for sale. The assessment based on the opposite assumption could not stand, and the assessee was entitled to consequential refund of tax deposited.

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Issues: Whether despatch of goods on consignment basis for sale outside the State amounted to a sale so as to attract sales tax under the Punjab General Sales Tax Act, 1948.

Analysis: The petitioner manufactured moong dal, sent it outside the State on consignment basis through commission agents, and the authorities treated the transaction as not constituting a sale on the footing that there was no transfer of property in the goods. The Court rejected that view and held that the earlier decisions taking the contrary view were incorrect. It further found from the pleadings and the assessment and appellate orders that the stand throughout had been that the goods were despatched for sale, and that the transaction was treated as a consignment sale.

Conclusion: Despatch of goods on consignment basis for sale amounted to a sale, and the assessment based on the contrary view could not be sustained in the assessee's case.

Final Conclusion: The assessment orders were quashed and the assessee was entitled to consequential refund of any tax deposited.

Ratio Decidendi: A despatch of goods on consignment basis for sale, where the transaction is treated as a sale and involves transfer of property in goods for consideration, is a sale for sales tax purposes.

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