Statutory procurement with real scope for mutual assent remains a sale, not compulsory acquisition, for sales tax purposes.

Rice supplied under the Andhra Pradesh Rice Procurement (Levy) Order, 1984 was treated as a sale, not compulsory acquisition, because the scheme did not wholly exclude mutual assent. The Court noted that while procurement price and mandatory supply obligations were fixed, the order still allowed dispute over the analyst's report, re-analysis of samples, final price adjustment, delivery terms, incidental charges, packing, classification, quality specifications, and rejection of non-conforming rice. Because some real scope for agreement remained, even on limited matters, the turnover fell within the Andhra Pradesh General Sales Tax Act, 1957 and was taxable.

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Issues: Whether the supply of rice under the Andhra Pradesh Rice Procurement (Levy) Order, 1984 amounted to a compulsory acquisition outside the scope of sales tax, or a sale within the meaning of the Andhra Pradesh General Sales Tax Act, 1957.

Analysis: The procurement order fixed the procurement price and required licensed millers or dealers to sell specified quantities of rice to the Food Corporation or State Corporation, but clause 6 also permitted dispute over the analyst's report, re-analysis of samples, and determination of the final payable price on the basis of that re-analysis. The order further dealt with delivery, incidental charges, packing, classification, quality specifications, and rejection of non-conforming rice, showing that the transaction was not wholly rigid. Applying the governing principle that a transaction remains a sale if mutual assent is not totally excluded, the Court held that even a minimal area of bargaining was enough to distinguish the arrangement from compulsory acquisition.

Conclusion: The supply of rice under the procurement order was a sale and not a compulsory acquisition, and the turnover was liable to tax under the Andhra Pradesh General Sales Tax Act, 1957.

Final Conclusion: The writ petitions failed because the statutory procurement arrangement left sufficient room for consensual elements in the transaction, bringing the turnover within the sales tax net.

Ratio Decidendi: Where a statutory procurement scheme still leaves any real scope for mutual assent, even on limited matters such as quality, classification, delivery-related charges, or price adjustment, the transaction is a sale and not a compulsory acquisition.

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