Sale of goods cannot be enlarged by deeming self-consumption a retail sale; the ultra vires assessment failed.

The constitutional entry for "sale of goods" was held to carry the same meaning as in the Sale of Goods Act, requiring a transfer of property for a price. A State could not expand that concept by deeming a dealer's own consumption of motor spirit and lubricants to be a retail sale, because such enlargement went beyond legislative competence under the relevant entry. The offending part of the definition was severable, and the assessment founded solely on that ultra vires enlargement could not stand. The extended definition and the assessment, insofar as they taxed goods consumed for the company's own vehicles, were therefore invalid and unenforceable.

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Issues: Whether the inclusive definition treating consumption by a retail dealer of motor spirit and lubricants as a retail sale, and the consequential assessment based on that definition, were within the State Legislature's competence.

Analysis: The expression "sale of goods" in the constitutional entry bears the same meaning as in the Sale of Goods Act. A taxable sale must involve transfer of property for a price and cannot be enlarged by deeming consumption by the owner to be a sale. The impugned clause in the definition of "retail sale" sought to include self-consumption by the dealer and thereby extend the charging provision beyond sales in the legal sense. That enlargement was beyond the State's legislative competence under the relevant entry. The offending part of the definition was severable, and the assessment order founded solely on that ultra vires part could not stand.

Conclusion: The extended definition and the assessment, to the extent they taxed motor spirit and lubricants consumed for the company's own vehicles, were invalid and unenforceable, and the challenge succeeded in favour of the assessee.

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