Compulsory levy sales can still be taxable sales when statutory compulsion does not alter their legal character.

Compulsory rice procurement under the A.P. Rice Procurement (Levy) Order, 1984 was treated as a sale in law, because a transaction carried out under mandatory statutory terms may still retain the legal character of sale despite the absence of a conventional voluntary bargain. Applying the Supreme Court principle in Vishnu Agencies, involuntary levy sales of rice remained taxable sales, so sales tax could validly be levied and collected on them. The writ petitions therefore failed.

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Issues: Whether sales tax could be levied and collected on involuntary sales of rice made under the A.P. Rice Procurement (Levy) Order, 1984.

Analysis: The issue was treated as settled by the Supreme Court decision in Vishnu Agencies, which held that a transaction effected in compliance with obligatory statutory terms may still amount to a sale in law. The earlier view that the absence of a conventional consensual contract necessarily excludes sale was not accepted in that decision. Applying that principle, involuntary procurement sales made under the levy order were held to remain taxable sales.

Conclusion: The levy and collection of sales tax on the involuntary sales were valid, and the writ petitions failed.

Ratio Decidendi: A transaction compelled by statute may still constitute a taxable sale if it retains the legal character of sale despite the absence of voluntary bargain in the usual sense.

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