Captive consumption of industrial alcohol by the same company is not a sale or purchase for tax purposes.

Industrial alcohol consumed captively within the same company's own chemical unit did not constitute a sale or purchase under the United Provinces Sales of Motor Spirit, Diesel Oil and Alcohol Taxation Act, 1939, because the charging provision applied to the first purchase and the statutory concept of sale required transfer for consideration between distinct entities. As the distillery and chemical unit belonged to the same undertaking, there was no transfer to another person and a person could not sell goods to itself. Article 366(29A) did not change that position, since it did not deem a transfer by a company to itself to be a sale; no purchase tax was leviable.

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Issues: Whether purchase tax could be levied on industrial alcohol manufactured by the petitioner and consumed captively within the petitioner's own chemical unit under the United Provinces Sales of Motor Spirit, Diesel Oil and Alcohol Taxation Act, 1939.

Analysis: The charging provision taxed the first purchase of alcohol, and the Act's definition of sale required a transfer for consideration. On the admitted facts, the distillery and the chemical unit belonged to the same company and the entire industrial alcohol was consumed within the petitioner's own undertaking. A sale or purchase presupposes transfer between two distinct entities, and a person cannot sell goods to itself. The constitutional amendment in Article 366(29A) did not alter this result, because it did not treat a transfer by a company to itself as a sale.

Conclusion: The captive use of the industrial alcohol did not amount to a sale or purchase, and no purchase tax was leviable under Section 3(1)(c) of the Act of 1939.

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