1961 (5) TMI 53 - SUPREME COURT

Levy, charge or collect any sales tax on transactions of what the petitioners characterised as hire-purchase agreements

Held that:- Appeal dismissed. There is no doubt that the agreement in question does contain not only a contract of bailment simpliciter but also an element of sale, which element has been seized upon by the legislature for the purpose of subjecting a transaction like that to the sales tax.

To consider the contention under head (3), namely, that though the Parliament may have had the power to tax something which was not strictly speaking a "sale", the law is open to the attack that it discriminates against traders in Delhi inasmuch as, it is further contended, such a law has not been made applicable to the whole of India. In our opinion, there is no substance in this contention because no proper foundation was laid in the pleadings for supporting such a contention.

Hire-purchase transactions have been included within the definition of "sale" for the purpose of Central sales tax, and this definition has become applicable throughout India, and it cannot, therefore, be said that the State of Delhi, and now the Union Territory of Delhi, has been selected for hostile discrimination,therefore, there is no substance in the contention that the extended definition of "sale" in the main statute infringes Article 14 of the Constitution.