Appropriation of goods determines sale timing under sales tax law, not later payment receipt or delivery.

Sales of tyres and tubes under the Tamil Nadu General Sales Tax Act, 1959 were treated as complete on appropriation of specific or ascertained goods to the contract, and not on later receipt of payment or delivery. The Act's scheme was applied to hold that, for unascertained or future goods, sale takes place when the goods are appropriated to the contract, while principles under the Sale of Goods Act on passing of property and reservation of the right of disposal were not determinative for intra-State sale timing. Segregation of the goods and entrustment to carriers under pro forma invoices constituted appropriation, so the assessee's contrary contention was rejected.

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Issues: Whether the sales of tyres and tubes were to be treated as completed on appropriation of the goods to the contract of sale under section 2(n), Explanation (3) of the Tamil Nadu General Sales Tax Act, 1959, or only when payment was received and the goods were taken delivery of under the Sale of Goods Act, 1930.

Analysis: The scheme of section 2(n) of the Tamil Nadu General Sales Tax Act, 1959 treats a sale of specific or ascertained goods as taking place when the contract is made and, in the case of unascertained or future goods, when the goods are appropriated to the contract. The provisions of the Sale of Goods Act concerning passing of property and reservation of the right of disposal were held to be inapposite for determining the time and place of intra-State sale under the State Act. The Court held that the appropriation of the goods occurred when they were segregated and entrusted to carriers under pro forma invoices, and that subsequent retirement of bank documents and receipt of payment did not govern the date of sale.

Conclusion: The sales were completed on the dates of appropriation under the Tamil Nadu General Sales Tax Act, 1959, and the assessee's contention that sale was completed only on receipt of payment was rejected.

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