Spiritual efficacy, not sale value, governs charmed articles supplied as services rather than taxable goods.

Supply of charmed articles was not treated as a sale under the Central Sales Tax Act, 1956 because the consideration was held to relate to the claimed spiritual efficacy imparted by recitation of mantras, not to the intrinsic value of the goods themselves. On that reasoning, the transaction was characterised as the rendering of spiritual services through material objects rather than a commercial transfer of movable goods. The assessee was therefore not a dealer for this purpose, and the tax levy based on treating the transaction as a sale could not be sustained.

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Issues: Whether the supply of charmed articles by the assessee amounted to a sale and whether the assessee was a dealer within the meaning of the Central Sales Tax Act, 1956.

Analysis: The assessee charged an amount not referable to the intrinsic value of the articles supplied. The charge was held to be for the spiritual efficacy allegedly imparted to the articles by recitation of mantras, and not for the articles as movable goods. On the same reasoning, the transaction was treated as the rendering of spiritual services through the medium of material objects rather than a commercial sale of the objects themselves. The facts were held to be covered by the earlier Bombay decision dealing with a similar transaction.

Conclusion: The supply of charmed articles did not amount to a sale, and the assessee was not a dealer for that purpose. The answer was in the negative, in favour of the assessee.

Final Conclusion: The reference was answered against the department and the tax levy based on treating the transaction as a sale could not be sustained.

Ratio Decidendi: Where the consideration is for spiritual or magical efficacy and not for the intrinsic value of the goods, the transaction is not a sale of goods but the provision of services through the goods.

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