Loan transaction for goods must be proved by documents, failing which the movement may be taxed as a sale under CST law.

A dealer claiming that aluminium wire rod moved on a loan basis must prove the arrangement by cogent documentary evidence, including the loan terms and return of goods. On the facts found, the assessee produced no adequate proof of a genuine loan transaction, and the Tribunal treated the dispatch and receipt of goods as independent transactions. The wide definition of "sale" under Section 2(g) of the Central Sales Tax Act, 1956 was applied to hold the movement taxable as a sale. The High Court found no perversity in the Tribunal's factual findings and declined to interfere.

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Issues: Whether the alleged transfer of aluminium wire rod on loan basis was proved and, if not, whether the transaction was exigible to tax as a sale under the Central Sales Tax Act, 1956.

Analysis: The record showed that the assessee asserted a loan transaction and return of goods, but the supporting documents necessary to establish a contractual loan arrangement and repayment were not produced. The definition of "sale" under Section 2(g) of the Central Sales Tax Act, 1956 is of wide amplitude and covers transfer of property in goods for consideration, including transfers otherwise than in pursuance of a contract. On the facts found, the Tribunal concluded that the dispatch and receipt of goods were independent transactions and that the assessee had not discharged the burden of proving a genuine loan transaction. The Court also found no reason to interfere with the Tribunal's factual findings.

Conclusion: The alleged loan transaction was not proved and the transaction was rightly treated as a taxable sale; the challenge to the Tribunal's order failed.

Ratio Decidendi: Where a dealer claims that a movement of goods was only on loan basis, the claim must be established by cogent documentary evidence; in the absence of such proof, the transaction may be treated as a sale within the wide definition in Section 2(g) of the Central Sales Tax Act, 1956, and findings of the final fact-finding authority will not be interfered with unless they are perverse.

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