Auction sale completion depends on express bid-acceptance terms, fixing sales tax at the rate on completion date.

An auction sale may be completed later than the fall of the hammer where the auction terms expressly keep the highest bid open for acceptance, because the parties can vary the default rule under the Sale of Goods Act, 1930. Here, the 30-day acceptance period meant the bidder could withdraw and the competent authority could accept or reject the bid during that period, so completion occurred only on expiry of the stipulated time, not on the auction date. The later sanction and execution of the lease deed did not change that completion date. Sales tax was therefore chargeable at the rate in force on expiry of the 30-day period, and the enhanced rate did not apply.

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Issues: Whether the auction sale of forest timber was complete at the fall of the hammer or only on expiry of the 30-day period during which the bid remained open for acceptance, and consequently whether sales tax was payable at the rate prevailing on the auction date or at the enhanced rate introduced later.

Analysis: The auction terms expressly kept the highest bid open for 30 days, during which the bidder could withdraw and the competent authority could accept or reject the bid. Section 64(2) of the Sale of Goods Act, 1930 ordinarily treats an auction sale as complete at the fall of the hammer, but section 62 permits the parties to vary that rule by express agreement. The auction condition therefore deferred completion of the sale beyond the auction date. Since the bid was neither withdrawn nor rejected within the stipulated period, the sale stood completed on expiry of that period, not on the date of auction. The later sanction and execution of the lease deed did not alter the date of completion of the sale.

Conclusion: The sale was completed on expiry of the 30-day period from the date of auction, and sales tax was payable at the rate in force on that completion date, namely 10 per cent. The enhanced rate was not applicable.

Ratio Decidendi: An auction sale may be completed later than the fall of the hammer where the auction terms expressly keep the bid open for acceptance and thereby vary the statutory rule under the Sale of Goods Act, 1930.

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