TaxTMI 
TaxTMI 
TaxTMI 
1958 (9) TMI 61
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....h the appellate order filed a petition in revision (Exhibit D) before the Board of Revenue, Bihar. For reasons explained in its judgment dated the 23rd March, 1955 (Exhibit E), the Board allowed the petition with the direction that the petitioner should file detailed evidence before the Sales Tax Officer to prove the amount of such despatches to facilitate the calculation of the total amount of exemption which may be rightly claimed by the assessee. 5. Being dissatisfied with the Board's order, the Commissioner of Commercial Taxes, Bihar, Patna, filed petition (Exhibit F), on behalf of the State of Bihar, before the Board for making a reference to the High Court on the following question said to be question of law: "Whether in the facts and circumstances of the case the despatches of sugar to the Province of Madras is liable to be taxed." For reasons explained in its judgment dated the 9th November, 1955 (Exhibit G), the Board did not admit the reference petition. 6.. Being dissatisfied with the Board's order, the Commissioner of Commercial Taxes has moved the High Court in the matter and as ordered by the High Court the Board refers the following question of law for their decis....
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....dressed by the Sugar Controller to the factory owner, directing him to supply sugar to the State Government in question in accordance with the despatch instructions received from the competent officer of the State Government. A copy of the allotment order was simultaneously sent to the State Government concerned, on receipt of which the competent authority of the State Government sent to the factory concerned detailed instructions about the destinations to which the sugar was to be despatched as also the quantities of sugar to be despatched to each place. In the case of the Madras Government it is admitted that it also laid down the procedure of payment, and the direction was that the drafts should be sent to the State Bank and it should be drawn on Parry and Company or any other party which had been appointed as stockist-importer on behalf of the Madras Government. It should be added that in this case the assessee was called upon to produce necessary documents relating to the transactions in question, but the assessee did not produce the documents. The assessee, however, admitted that the general arrangement between the parties was the one set out in this paragraph. It is necessa....
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....ixed under the provisions of sub-clause (1)." Paragraph 7 is important and must be reproduced in full: "7(1) The Controller may, from time to time: (i) allot quotas of sugar or sugar products or of both for the requirements of any specified Province, or area, or market, (ii) issue directions to any producer or dealer to supply sugar or sugar products to such Provinces, areas or markets or such persons or organisations, in such quantities, or such types or grades, at such times, at such prices and in such manner as may be specified by the Controller, and (iii) require any producer or dealer to keep in reserve stocks of sugar or sugar products in such quantities and of such types and grades as he may direct from time to time: Provided that where the price or maximum price of any sugar or sugar product has been fixed in accordance with sub-clause (1) of clause 6 the Controller shall in respect of such sugar or sugar product specify the price or maximum price under para (ii) of this sub-clause accordingly. (2) Every producer shall, notwithstanding any existing agreement with any other person, give priority to, and comply with, any directions issued to him under sub-clause (1). Paragrap....
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....goods as security for payment of the price, be deemed to be a sale: Provided further that notwithstanding anything to the contrary in the Indian Sale of Goods Act, 1930 (III of 1930), the sale of any goods which are actually in Bihar at the time when, in respect thereof, the contract of sale is defined in section 4 of that Act is made, shall, wherever the said contract of sale is made, be deemed for the purposes of this Act to have been made in Bihar." The argument of the Government Advocate was that at the time the, contract of sale was effected between the parties, the sugar was in Bihar and so there was a sale within the proviso to section 2(g) of the Bihar Sales Tax Act as it stood on the material date. It was contended on behalf of the assessee that there was no offer and no acceptance and there was no agreement between the parties because there was no consensus ad idem. It was argued that the State of Madras did not know at the time of allotment as to which factory would supply the sugar, and that it could not, therefore, be said that there was a contract between the assessee and the State of Madras with regard to the sale of sugar which was eventually sent by the assessee. ....
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....rson, in an offer made by him to another person, expressly or impliedly intimates a particular mode of acceptance as sufficient to make the bargain binding, it is only necessary for the other person to whom such offer is made to follow the indicated method of acceptance; and if the person making the offer expressly or impliedly intimates in his offer that it would be sufficient to act on the proposal without communicating acceptance of it to himself performance of the condition is a sufficient acceptance without notification". In Brodgen v. Metropolitan Railway Co.(1877) 2 App. Cas. 666 at p. 691., Lord Blackburn stated the principle in similar terms: "But I have always believed the law to be this, that when an offer is made to another party, and in that offer there is a request express or implied that he must signify his acceptance by doing some particular thing then as soon he does that thing, he is bound. If a man sent an offer abroad saying: I wish to know whether you will supply me with goods at such and such a price, and, if you agree to that, you must ship the first cargo as soon as you get this letter, there can be no doubt that as soon as the cargo was shipped the contra....
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....as soon as the assessee made appropriation of the sugar in its factory or at the time of despatch of sugar at Hasanpur railway station. The point has been well discussed by Blackburn in his Treatise on Sale, 3rd edition, at page 137 as follows: "The general rule laid down by Lord Coke in Heyward's case(1), and adopted in Comyn's Digest, Election, seems to be that when from the (1) 2 Coke 36. nature of an agreement an election is to be made, the party, who is by the agreement to do the first act, which from its nature cannot be done till the election is determined, has authority to make the choice in order that he may perform his part of the agreement; when once he has performed the act the choice has been made and the election irrevocably determined; till then he may change his mind as to what the choice shall be, for the agreement gives him till that time to make his choice. It follows from this, that where from the terms of an executory agreement to sell unspecified goods, the vendor is to despatch the goods, or to do anything to them that cannot be done until the goods are appropriated, he has the right to choose what the goods shall be; and the property is transferred the mome....
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...., on which the Sale of Goods Act was founded seem to show that the appropriation would not be such as to pass the property if it appears or can be inferred that there was no actual intention to pass it. If the seller takes the bill of lading to his own order and parts with it to a third person, not the buyer, and that third person, by possession of the bill of lading, gets the goods, the buyer is held not to have the property so as to enable him to recover from the third party, notwithstanding that the act of the seller was a clear breach of the contract: Wait v. Baker (1848) 2 Ex. 1. ; Gabarron v. Kreeft(1875) 10 Ex. 274. This seems to be because the seller's conduct is inconsistent with any intention to pass the property to the buyer by means of the contract followed by the appropriation. On the other hand, if the seller deals with the bill of lading only to secure the contract price, and not with the intention of withdrawing the goods from the contract, he does nothing inconsistent with an intention to pass the property, and therefore the property may pass either forthwith subject to the seller's lien or conditionally on performance by the buyer of his part of the contract: Mira....