1985 (7) TMI 330

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....ales Tax Act, 1948. The respondent-firm, Messrs. Amrit Roller Flour Mills, carries on business at Chandigarh. It is registered as a dealer under the Punjab General Sales Tax Act, 1948 (hereinafter called the "Act"). It holds a licence under the Wheat Roller Flour Mills (Licensing and Control) Order, 1957 (hereinafter referred to as the "Control Order"). Wheat is supplied to the respondent under the orders of the Government of India. The respondent grinds the wheat and supplies the atta, maida and suji emerging from that process to the holders of permits issued by the District Food and Supplies Officer under the Control Order. The respondent was assessed for the years 1964-65 to 1967-68 to sales tax under the Act on the turnover of the sup....

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....eals by the Union Territory of Chandigarh, the sole question is whether the transactions effected by the respondent fall within definition of "sale" under the Act. Clause (h) of section 2 of the Act defines a "sale" to mean "any transfer of property in goods.........for cash or deferred payment or other valuable consideration, but does not include a mortgage, hypothecation, charge or pledge". The broad basis on which the High Court has proceeded is that a sale necessarily implies the freedom to contract, and that all the four elements, that is to say, that the parties should be competent to contract, that there should be mutual assent, that property or goods should pass from the seller to the buyer and that the price in money should be paid....

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....ceived by him, or likely to be produced or received by him, to the Central Government or a State Government or such other person as may be specified in the Order. In the exercise of that power the Central Government made the Control Order with which we are concerned. Clause 3 of the Order provides that no owner or person in-charge of a roller mill shall manufacture, or cause to be manufactured, any wheat product except under and in accordance with the terms and conditions of a licence issued under that Order. The licence was to be in form II. It was an annual licence renewable from year to year, and liable to suspension or cancellation in the event of a contravention of the Control Order or any of the conditions of the licence. Paragraph V ....

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.... the Food Corporation of India, the High Court concluded, could not be said to sell the rice and was therefore not liable to pay sales tax, there being no freedom of contract within the meaning of the law laid down in Salar Jung Sugar Mills Ltd. v. State of Mysore [1972] 29 STC 246 (SC) and the element of mutual assent, implicit or explicit, being non-existent. The High Court observed that the facts of the case brought it within the law explained by this Court in Chittar Mal Narain Das v. Commissioner of Sales Tax [1970] 26 STC 344 (SC). We think that the case before us is distinguishable from Food Corporation of India [1976] 38 STC 144. It is a case which falls more appropriately within the rule laid down by this Court in Vishnu Agencies (....