TMI Blog1962 (12) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... petition will therefore be allowed and a writ will issue declaring that the order of assessment made by the first respondent dated December 26, 1960, in so far as it relates to levy of tax on motor spirit and lubricants consumed during the period of assessment for the vehicles of the company is invalid. The respondents will pay the costs of this petition to the company. - Petition No. 85 of 1961 - - - Dated:- 21-12-1962 - SINHA B.P., GAJENDRAGADKAR P.B., WANCHOO K.N., DAS GUPTA K.C. AND SHAH J.C. JJ. B. Sen, Senior Advocate (K.L. Hathi and I.N. Shroff, Advocates, with him), for the respondents. S.T. Desai, Senior Advocate (J.B. Dadachanji, O.C. Mathur and Ravinder Narain, Advocates of J.B. Dadachanji and Co., with him), for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gislature and hence void and the order of the first respondent seeking to impose liability upon the company for payment of tax infringes the fundamental rights of the company under Article 19(1)(f) and (g) of the Constitution. Section 2(k) of the Madhya Pradesh Sales of Motor Spirit and Lubricants Taxation Act defines "a retail dealer" as meaning "any person who, on commission or otherwise, sells or keeps for sale motor spirit or lubricant for the purpose of consumption by the person by whom or on whose behalf it is or may be purchased." Section 2, clause (1), defines "retail sale" as meaning "a sale by a retail dealer of motor spirit or lubricant to a person for the purpose of consumption by the person by whom or on whose behalf it is or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) mutual assent; (3) a thing, the absolute or general property in which is transferred from the seller to the buyer; and (4) a price in money paid or promised. A transaction which does not conform to this traditional concept of sale cannot be regarded as one in respect of which the State Legislature is competent to enact an Act imposing liability for payment of tax. It was observed at page 407: "A power to enact a law with respect to tax on sale of goods under Entry 48 must, to be intra vires, be one relating in fact to sale of goods, and, accordingly, the Provincial Legislature cannot, in the purported exercise of its power to tax sales, tax transactions which are not sales by merely enacting that they shall be deemed to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 (h)(ii) of the Madras General Sales Tax Act, 1939, as amended by Act XXV of 1947, in so far as it included goods included in a works contract, fell to be determined, in the light of the competence of the Provincial Legislature under Entry 48, List II, in Seventh Schedule of the Govern- ment of India Act, 1935. Under the Constitution the relevant entry conferring legislative power upon States to tax sale of goods is Entry 54 of List II. As the scheme of division of legislative power under the Constitution has remained unaltered, the principle of Gannon Dunkerley's case [1959] S.C.R. 379; 9 S.T.C. 353., applies in adjudging the validity of the provisions of the Madhya Pradesh Act 4 of 1958. Consumption by an owner of goods in which he de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of dealer's counsel (that the goods consumed for the vehicles of the dealer are not liable to tax under section 3) and taxed on the goods consumed by the dealer, as above." The order of the Sales Tax Officer founded upon a part of the statute which is ultra vires cannot be sustained. Counsel for the State of Madhya Pradesh contends in this petition that the company is not the owner of the motor spirit and lubricants in which it deals: it is merely a commission agent for sale in respect of the goods supplied to it by the Caltex (India) Ltd. and on that account consumption for its own purpose of goods belonging to its principal amounts to sale within the meaning of the first part of the definition of section 2(1) of the Act. But the S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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