Controlled ration shop transactions may still be sales where buyers retain real choice, attracting tax and registration requirements.

Controlled fair price shop transactions with ration card holders were treated as sales because they involved transfer of property in goods for consideration and retained an element of real volition, even though price, quantity, and supply were regulated. On that basis, the dealers fell within the Bihar Sales Tax Act, 1959, and the State definition of sale was not inconsistent with the Sale of Goods Act, 1930. Once the transactions were treated as sales, liability to additional sales tax and the requirement of valid registration followed, and the assessment notice was not legally invalid.

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Issues: (i) Whether the transactions carried on by Government fair price shop owners with ration card holders constituted sales and rendered them dealers under the Bihar Sales Tax Act, 1959. (ii) Whether the definition of sale in the Bihar Sales Tax Act was ultra vires because it was said to be inconsistent with the Sale of Goods Act, 1930, and whether the petitioners were liable to additional sales tax and registration.

Issue (i): Whether the transactions carried on by Government fair price shop owners with ration card holders constituted sales and rendered them dealers under the Bihar Sales Tax Act, 1959.

Analysis: The definition of dealer in the Bihar Sales Tax Act was broad enough to include persons carrying on such business if the transactions answered the description of sale. The expression sale in the State Act required transfer of property in goods for consideration, which was consistent with the concept of sale under section 4 of the Sale of Goods Act, 1930. Although price, quantity, and supply conditions were controlled, the ration card holder still had a real choice whether to purchase, and complete absence of mutual assent was not shown. Transactions in rationed goods of this kind were treated as sales in settled law where some element of volition remained.

Conclusion: The transactions were sales and the petitioners were dealers within the meaning of the Act.

Issue (ii): Whether the definition of sale in the Bihar Sales Tax Act was ultra vires because it was said to be inconsistent with the Sale of Goods Act, 1930, and whether the petitioners were liable to additional sales tax and registration.

Analysis: The State definition did not conflict with the Sale of Goods Act because both proceeded on the essential requirement of transfer of property in goods for a price. Once the transactions were held to be sales, liability to additional tax under section 3B followed, and a dealer liable to tax or additional tax was required to hold a valid registration certificate. The notice issued for enquiry and assessment under section 16(5) disclosed no legal invalidity.

Conclusion: The definition was not ultra vires, and the petitioners were liable to additional sales tax and registration.

Final Conclusion: The writ petition failed on all substantive challenges, and the impugned action of the tax authorities was sustained.

Ratio Decidendi: Where the essential elements of a sale remain present and the buyer retains real volition to accept or reject the goods, controlled or regulated supply transactions may still constitute sales exigible to sales tax; a statutory definition consistent with that concept is not unconstitutional.

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