Compulsory statutory supply is not a sale where parties lack contractual volition and price is fixed by requisition.

Compulsory supply of rice to the State under a statutory requisition order at controlled prices was not a sale for sales tax purposes because the transaction lacked mutual assent and contractual volition. A sale requires the essential elements of contract, including bargain, agreed price, delivery and passing of title; where supply is imposed by statute and the supplier has no choice over quantity or price, the arrangement does not satisfy that definition. The disputed turnover was therefore not exigible to sales tax, and the assessment was quashed to that extent in favour of the assessee.

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Issues: Whether the compulsory supply of rice to the State Government under the Andhra Pradesh Paddy and Rice (Declaration and Requisition of Stocks) Order, 1964 at controlled prices amounted to sales exigible to sales tax under the Central Sales Tax Act.

Analysis: The requisition order required stockholders to supply specified quantities of rice to the State Government or its agents at controlled prices, leaving the assessee with no option as to either supply or price. A transaction is a sale only if it contains the essential elements of a contract of sale, including mutual assent, bargain, price, delivery, and passing of title. Where the obligation to supply arises compulsorily from a statutory order and not from any contract, the transaction does not answer the definition of sale. The controlling principle applied was that compulsory deliveries under a statutory procurement order, without volition in the fundamentals of the transaction, are not sales merely because consideration is fixed or determinable.

Conclusion: The disputed turnover did not represent sales and was not liable to sales tax. The assessment was rightly quashed to that extent, in favour of the assessee.

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