Customer-supplied scrap converted for labour charges is not a sale where no fixed price or sale consideration exists.

Receipt of customer-supplied aluminium scrap or old articles for conversion into new articles, with payment confined to labour or making charges, was treated as outside the statutory concept of sale under section 2(n) of the Andhra Pradesh General Sales Tax Act. The text emphasises that a sale requires transfer of property in goods for monetary consideration, and that no fixed price or concluded bargain existed for the scrap, the finished articles, or the arrangement as a whole. On that basis, the composite transaction could not be split into artificial purchase and sale legs, and sales tax was not exigible on the turnover.

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Issues: Whether the transaction of receiving aluminium scrap or old aluminium articles from customers and supplying new aluminium articles of the same weight on payment of labour charges amounted to a sale within the meaning of section 2(n) of the Andhra Pradesh General Sales Tax Act.

Analysis: The transaction showed no fixed price for the scrap, the old articles, or the new articles. The amount collected from customers was towards making or labour charges, not towards price. A sale under section 2(n) requires transfer of property in goods for cash, deferred payment, or other monetary consideration. On the facts found, there was no transfer for cash consideration, no concluded bargain of sale, and no basis to split the arrangement into artificial purchase and sale transactions. The receipt of scrap was only as raw material for conversion into new articles, and the cash element did not constitute sale price.

Conclusion: The transaction did not amount to a sale under section 2(n) of the Andhra Pradesh General Sales Tax Act, and tax could not be levied on the turnover in question.

Final Conclusion: The tax revisions succeeded because the composite arrangement was held to be outside the statutory concept of sale and therefore not exigible to sales tax.

Ratio Decidendi: Where goods are supplied after converting customer-supplied scrap or old articles, and the money received is only for labour or making charges without any fixed monetary price for the goods, the transaction is not a sale and is not taxable as such.

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