1953 (3) TMI 20 - SUPREME COURT

Whether in these circumstances the sale transactions were liable to be taxed under the General Sales Tax Act of Madras?

Whether the sales did take place within the Province of Madras or not?

Held that:- Appeal allowed. The mere fact that the contract for sale was entered into within the Province of Madras does not make the transaction, which was completed admittedly within another Province, where the property in the goods passed, a sale within the Province of Madras according to the provisions of the Madras Sales Tax Act and no tax could be levied upon such a transaction under the provisions of the Act. A contract of sale becomes a sale under the Sale of Goods Act only when the property in the goods is transferred to the buyer under the terms of the contract itself. The presence of the goods within the Province at the time of the contract would undoubtedly make the sale, if subsequently completed, a sale within the Province by reason of the Explanation added by Act XXV of 1947 but as this Explanation was not in operation during the relevant period with which we are concerned, the assessment of sales tax, in our opinion, on the transactions during this period is illegal and not warranted by the provisions of the Act.