Intra-company transfers are not sales where no ownership passes between separate legal persons.

Transfers of cement between divisions of the same incorporated company, though each division was separately registered for assessment purposes, did not amount to sales because a sale requires transfer of property in goods from one person to another for consideration. Separate registration under sales tax law did not create separate juristic persons, and internal debit and credit entries, even if sales tax was shown, could not change the real character of an intra-company movement. The decisive test was whether ownership passed between distinct persons; as no such transfer occurred within the same legal entity, the transactions were not taxable sales and the assessee succeeded.

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Issues: Whether transfer of cement by one division of a company to its other divisions, all separately registered as dealers, amounted to a sale liable to tax.

Analysis: A sale under the sales tax laws requires transfer of property in goods by one person to another for consideration. The company's units were integral parts of one incorporated legal entity and did not have separate juristic existence merely because they were separately registered for assessment convenience. Separate registration under the sales tax law did not create separate legal persons, and accounting entries debiting and crediting the cost of cement, even with sales tax shown, could not alter the real character of the transaction. The decisive test was whether ownership passed from one person to another, and no such transfer occurred between different units of the same company. The reasoning was consistent with the principle that the true nature of a transaction is not determined by the book entries or by the form of internal billing.

Conclusion: The transfers were not sales, and the tax revisions succeeded in favour of the assessee.

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