Contractual tax liability in pre-GST auction sales remains binding despite later GST enactment and bars shifting the burden.

An auction sale of timber concluded before the GST regime remained governed by the auction terms fixing tax and interest obligations. The buyer had agreed to pay the balance price with the then applicable tax, and the later commencement of GST did not alter the tax liability already attached to the completed contract. Section 64-A of the Sale of Goods Act, 1930 was unavailable because it applies only where the contract does not show a different intention; here, the auction conditions expressly allocated tax liability and delayed-payment interest. The purchaser therefore could not shift the burden to the Maharashtra GST regime, and the contractual tax obligations continued to bind the parties.

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Issues: (i) Whether the purchaser of timber in an auction conducted before the commencement of the GST regime could insist on payment of the balance consideration and taxes under the Maharashtra Goods and Services Tax Act, 2017 instead of the tax regime governing the auction terms; (ii) Whether Section 64-A of the Sale of Goods Act, 1930 permitted shifting of the tax burden after the contract of sale had already been concluded.

Issue (i): Whether the purchaser of timber in an auction conducted before the commencement of the GST regime could insist on payment of the balance consideration and taxes under the Maharashtra Goods and Services Tax Act, 2017 instead of the tax regime governing the auction terms.

Analysis: The auction sale was completed on the dates of acceptance of the bids, and the purchaser had agreed to the auction conditions requiring payment of the balance price together with the then applicable tax and interest for delayed payment. The goods were ready for delivery on completion of the auction, and the extended time for payment did not alter the date on which tax liability was fixed. The later commencement of the GST regime did not alter the contractual tax obligation attached to a sale already concluded.

Conclusion: The claim to be assessed under the Maharashtra Goods and Services Tax Act, 2017 was rejected.

Issue (ii): Whether Section 64-A of the Sale of Goods Act, 1930 permitted shifting of the tax burden after the contract of sale had already been concluded.

Analysis: Section 64-A operates only where the contract does not reveal a different intention regarding tax liability. Here, the auction terms specifically fixed the tax payable on the auction price and also provided for interest on delayed payment. The purchaser had already paid part of the amount in terms of those conditions, showing that the parties intended the agreed tax regime to govern the transaction. In such circumstances, Section 64-A could not be invoked to reduce or remold the contractual tax obligation.

Conclusion: Section 64-A did not assist the purchaser.

Final Conclusion: The purchaser remained bound by the tax and interest obligations arising from the auction contract, and the later GST enactment did not displace those obligations.

Ratio Decidendi: Where an auction sale is concluded before the commencement of a later tax regime and the contract fixes the applicable tax liability, subsequent statutory changes do not override the agreed terms unless the contract itself shows a different intention.

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