Paddy procurement under levy order treated as sale in law, making transactions liable to sales tax.

Paddy delivered by cultivators to nominated agents under the levy order constituted sales for sales tax purposes because the agents were not mere conduits for the Government. The order required the agents to take delivery, weigh, inspect, store and supply the paddy or equivalent rice on their own responsibility, indicating that they acquired ownership and dealt with the stock on their own account before resale to the Government. The absence of a formal written contract did not negate mutuality, as the transaction still allowed agreement on quality, timing, delivery, acceptance and payment. The regulatory control regime limited the trade, but did not remove the essential elements of a sale, so the transactions were liable to sales tax.

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Issues: Whether paddy transactions entered into by cultivators with nominated agents under the levy order were sales within the meaning of the sales tax law and therefore exigible to tax.

Analysis: The relevant levy order required cultivators to deliver paddy to nominated agents at notified prices, but the agents were not mere conduits for the Government. The order treated the nominated dealer as an agent for procurement, required him to take delivery, weigh and check the stock, store it at his own responsibility, and supply the paddy or equivalent rice to the Government for a notified price that included reasonable margin and incidental charges. These features showed that the dealer acquired ownership of the stock, dealt with it on his own account, and then resold it to the Government. The absence of a formal written contract did not destroy mutuality, because the transaction still left room for agreement on quality, timing, mode of delivery, acceptance after inspection, and payment. The control regime regulated the trade, but did not eliminate the essential elements of a sale.

Conclusion: The transactions were sales in law and were liable to sales tax.

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