Controlled commodity transactions remain sales when mutual assent survives despite heavy regulatory restrictions.

A transaction involving controlled commodities remains a sale under section 2(g) of the Orissa Sales Tax Act, 1947 if the essential elements of sale are present, including competence of parties, transfer of property, and payment of price in money. Regulatory control may restrict freedom of contract, but it does not negate sale unless mutual assent is wholly excluded. Where consumers are not compelled to buy from a particular retailer and the retailer retains some real volition in supply, quantity, or mode of dealing, the arrangement continues to be a contract of sale and is liable to sales tax.

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Issues: Whether the transaction between the retailer and the consumers, effected under the control order and the appointment agreement for sale of controlled commodities, amounted to a sale within the meaning of section 2(g) of the Orissa Sales Tax Act, 1947.

Analysis: The essential elements of a sale are competence of the parties, mutual assent, transfer of property in the goods, and price in money. In the present transaction, the parties were competent, title passed on payment, and price was paid in cash. The decisive question was whether mutual assent was wholly excluded by the control scheme. The transaction was held to be one where the freedom of contract was restricted but not abrogated altogether. The consumers were not compelled to purchase from the retailer, and the retailer retained limited volition in matters such as supply, quantity, and mode of dealing within the controlled distribution system. Where mutual assent is not completely excluded, the transaction remains a contract of sale notwithstanding strong regulatory control.

Conclusion: The transaction constituted a sale under section 2(g) of the Orissa Sales Tax Act, 1947, and the sales tax assessment was upheld.

Ratio Decidendi: A transaction subjected to control orders is nevertheless a sale if the parties retain some real scope for mutual assent or contractual volition, even though the freedom of contract is substantially restricted.

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