TaxTMI 
TaxTMI 
1996 (10) TMI 379
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....s delivered by FAIZAN UDDIN, J.-Leave granted. Since common questions of law and facts arise for our consideration in these appeals and special leave petitions, the same are being disposed of by a common judgment. The appeals and special leave petitions arise out of an order passed by the High Court of Madras in revision preferred by the respondent herein, under section 38 of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as "the Act") relating to certain transactions involved therein which are sought to be taxed as sale. Since we have to decide the nature of transaction in order to determine the tax liability which is the question common to all these appeals and the special leave petitions, we shall ....
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....e person or party who purchases the coupon by paying Rs. 5. The coupon referred to in the scheme is a printed order form which is as follows: "Order form No. 17435 D. Regd. No. Sri Srinivasa Sales Circulation (Regd.) No. 11, Gandhi Street, Villivakkam, Madras-49. From, ...................... Dear Sirs, As mentioned in your list of articles No................. I request you to kindly send me................ Please send your coupons by V.P.L., for the amount of Rs. 16 sent by me. Place: Yours faithfully, Date: Signature Canvasser's signature." Thus, on payment of a sum of Rs. 5 to the company a coupon is sent to the individual concerne....
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....er V.P.L. Rs. 16 and informs A also of that fact in the printed form which reads as under: "We have received your three original order forms and the letter dated........ and thank you very much for the same. According to the rules of our firm today we have sent 3 V.P.Ls. containing 3 order forms in each V.P.L. for Rs. 16 to each among three members as addressed in that order forms. As soon as they clear the V.P.Ls. by paying Rs. 16 each, we will send you the required article item No...... by registered parcel. So, you please encourage them to clear the V.P.L by paying Rs. 16 each." If B, C and D honour the V.P.Ls. and pay money, A then becomes entitled to the article which he had chosen in his order form. That article is sent by the c....
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....e taxed under section 3(1) of the Act. The assessing officer also imposed a penalty of Rs. 6,149 under section 12(3) of the Act for failure of not filing the return in form A-1. This order of the Assessing Officer found favour with the Appellate Assistant Commissioner as well as the Sales Tax Appellate Tribunal. The respondent-assessee then went up in revision before the High Court of Judicature at Madras. The High Court of Madras took the view that the transfer of article by the company was not for money consideration alone and, therefore, it would not be a sale at all. Consequently, the High Court held that since the transactions involved in the scheme of the assessee are not sale, the assessees are not liable to be taxed as sales u....
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.... the transactions involved in the scheme of the assessee are not liable to tax as sales tax under section 3(1) of the Act. It may be stated that in order to constitute a sale under the Sale of Goods Act, it is essential to establish that there is an agreement between the parties for transfer of title to the goods and that such agreement should be supported by money consideration and as a result of the transaction the goods, article or the property must actually pass to the purchaser. It is settled law that the expression "sale" under the Sales Tax Act has to be understood with reference to the definition of "sale of goods" under the Sale of Goods Act. But if the title of the goods passes without any contract between the parties, express ....
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.... each, they will send him the required article by registered parcel. Thereafter, the company ultimately despatches the article of his choice to the customer A with a covering letter advising him to receive the article by paying the stated amount. From these facts, it is clear that there may not be a formal contract for sale and purchase of the article in any specific form, but such a contract may be spelt out from the correspondence and interaction between the parties. In the present case an implied contract between the parties is spelt out when the company offers the coupon(s) against payment and the article of the choice is ultimately sent to the customer for payment of price which is accepted by the customer. There is thus offer and acce....