TaxTMI 
TaxTMI 
1963 (4) TMI 29
X X X X Extracts X X X X
X X X X Extracts X X X X
.... circles at Madras. For the year 1957-58 the assessee returned a gross turnover of Rs. 36,32,087-83 and a net turnover of Rs. 33,08,111-69. The Commercial Tax Officer, Assessment 11, North Madras, determined the net turnover at Rs. 33,69,834-84. In determining the taxable turnover of the assessee, the Commercial Tax Officer accepted the contention of the assessee, that the manufacturing charges realised by it on the order placed by third parties for conversion of a particular metal supplied by them into sheets of the same metal are not to be included in the taxable turnover. But a scrutiny of the conversion ledger maintained by the assessee disclosed that it received copper scrap from customers for being converted into brass sheets and for ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... entered similarly. The Tribunal held that the transaction of Margabhandu Iyer indicated that the assessee purchased copper scrap and sold brass sheets and rings. The Tribunal was of the view that the transactions above referred to would come under the definition of "sale" in section 2(h) read with rule 17 of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939. In the end the Tribunal dismissed the appeal. It is against this order of the Tribunal that the assessee has now preferred the present revision. It is necessary to give some more facts for a proper disposal of the revision. The assessee is a Corporation having its factories at Mettur Dam, Salem District and Tiruvottiyur High Road, Madras. It has depots at Mint Stree....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rned counsel further contended that the present case is really governed by the principle laid down in South India Metal Works and Rolling Mills v. State of Madras[1960] 11 S.T.C. 507., where the assessee received scrap metal from his customers, melted the scrap, manufactured sheets and rings and gave back to the customers the new sheets and rings. It was held that there was no element of sale either when the assessee took over the scrap for the specific purpose of melting and converting into sheets and rings or when there was delivery of the finished product. i.e., sheets and rings. The learned counsel also relied on the decision in Raju Chettiar and Brothers v. State of Madras[1955] 6 S.T.C. 131. In that case the plaintifffirm carrying on ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ourse of trade or business for cash or for deferred payment or other valuable consideration ....." In Jayarama Chettiar, In re[1948] 1 S.T.C. 168., Govinda Menon., J., while considering the meaning of "sale" given in the Act observed at page 171: "..... in order to bring the transaction within the ambit of the term as defined in the Madras General Sales Tax Act it need not necessarily be that money alone should be the consideration. Every sale under the Sale of Goods Act is certainly a sale under the General Sales Tax Act, but every sale under the General Sales Tax Act will not come within the definition of the term in the Sale of Goods Act, e. g., if a person transfers the property in goods to another in the course of trade or business ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ur v. Brown19 Johns. (Amr.) Rep. 44., of which he disapproves in common with Mr. Justice Story, adopts the test, "whether the identical subject-matter was to be restored either as it stood or in an altered form; or whether a different thing was to be given for it as an equivalent; for in the latter case it was a sale, and not a bailment." In Halsbury's Laws of England, Vol. 34, 3rd Edn., there is the following passage at page 6: "The law relating to contracts of exchange or barter is undeveloped, but the courts seem inclined to follow the maxim of the civil law, permutatio vicina est emptioni, and to deal with such contracts as analogous to contracts of sale. It is clear, however, that statutes relating to sale would have no application ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sale of brass sheets to Margabhandu Iyer. In this connection we may usefully refer to the observations of Sadasiva Ayyar, J., in Ariyaputhira v. Muthukumaraswami(1): "If two persons mutually exchange two things (neither of which is 'money only') it may be an exchange or barter and not a sale. But if they mutually fix the values of the exchanged things in current coin and exchange them as of equal value, I think they might be held to effect 'sales' and to pay 'prices' and not merely to effect an exchange or barter." It is clear from the facts of this case that the disputed turnover relates to sale of brass sheets by the assessee to its customers. During the course of the transactions there is an element of sale both at the time when th....