Free supply of materials to contractors was not a sale, so no sales tax arose under the trade tax law.

Free supply of cast iron scrap by the assessee to contractors for manufacture and supply of railway sleepers did not amount to a "sale" within the meaning of section 2(h) of the U.P. Trade Tax Act, 1948. Following an earlier decision on the same kind of transaction, the Court treated the transfer as outside the statutory definition of sale and, as a result, held that no sales tax liability arose on that supply.

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Issues: Whether the free supply of cast iron scrap by the assessee to contractors engaged for manufacture and supply of railway sleepers amounts to "sale" within the meaning of section 2(h) of the U.P. Trade Tax Act, 1948, and is therefore exigible to sales tax.

Analysis: The controversy was identical to an earlier decision of the Court involving the same kind of transaction. Following that decision, the Court held that supply of cast iron scrap free of cost to the contractors did not constitute a sale within the statutory meaning. Once the transaction was found not to be a sale, no liability to pay sales tax could arise on that supply.

Conclusion: The transaction did not amount to a sale and was not taxable under the Act.

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