Controlled supply of rice remained a taxable sale where contracts, title transfer, and sales tax liability were preserved.

Supply of rice by millers to retail dealers under requisition and control orders remained a taxable sale where the essential incidents of sale were not wholly displaced by statutory control. The court held that a transaction is not a sale only when compulsion removes all real choice and converts it into compulsory acquisition; if terms such as delivery, timing, or payment remain open, the sale character survives. On the facts, valid and binding contracts existed, title passed to the dealers, and the control orders contemplated sales tax. The supply was therefore exigible to sales tax under the Act.

---

---

Issues: Whether the supply of rice by rice millers to retail dealers pursuant to requisition orders and control orders, with controlled price, quantity and transferee fixed by the authorities, constituted sales exigible to sales tax under the Andhra Pradesh General Sales Tax Act, 1957.

Analysis: The expression "sale" under section 2(n) of the Act was held to correspond to a sale of goods within section 4 of the Sale of Goods Act. A transaction is not a taxable sale if every essential ingredient of sale is eliminated by statutory compulsion so that the parties have no real choice or volition and the transaction becomes one of compulsory acquisition. But where some essential incidents of the bargain, such as mode, place or time of delivery or payment, remain open to agreement, the transaction retains the character of a sale even though its other features are controlled by statute or control orders. Applying that test, the rice millers were found to have entered into valid and binding contracts of sale with the retail dealers, title passed under those transactions, and the control orders themselves contemplated collection of sales tax.

Conclusion: The supply of rice by the millers to the retail dealers was held to be a sale exigible to sales tax under the Act.

---