Departmental supply of cement to contractors was not a sale and was not liable to sales tax.

Cement supplied by a Government department to its contractors for departmental work was not a sale under the U.P. Sales Tax Act, 1948 because the contract kept the materials under the department's control, prohibited the contractor from removing them at will, and allowed the department to take back unused stock at the lower of issue rate or market rate. On those terms, the supply did not satisfy the statutory definition of sale in section 2(h), and earlier authority supported the same view. The departmental supply of cement was therefore not liable to sales tax.

---

---

Issues: Whether cement supplied by a Government department to its contractors for execution of departmental work constituted a sale exigible to tax under the U.P. Sales Tax Act, 1948.

Analysis: The contract terms showed that the materials supplied by the department would remain under the control of the work and could not be removed by the contractor at will. The department retained authority to take back unused materials at the specified issue rate or current market rate, whichever was less. On these terms, the supply did not answer the statutory definition of sale under section 2(h) of the U.P. Sales Tax Act, 1948. The conclusion was supported by earlier authority holding that such departmental supply of cement to contractors is not a sale.

Conclusion: The supply of cement by the Government department to its contractors was not a sale and was not liable to sales tax.

---