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TMI Blog1953 (3) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt under Articles 134(1)(c) and 132 (1) of the Constitution, is directed against an appellate judgment of a Division Bench of the High Court of Madras, passed in Criminal Appeal No. 129 of 1952, by which the learned judges affirmed an order of the Seventh Presidency Magistrate, Madras, dated 25th February, 1952, convicting the appellant of an offence punishable under Section 15 of the Madras General Sales Tax Act and sentencing him to pay a fine of Rs. 1,000; in default to suffer imprisonment for a period of 3 months. The appellant is a partner of a firm of merchants called "IndoMalayan Trading Company" which has its head office in the city of Madras and carries on the business of selling and purchasing groundnut oil, sago and kirana arti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, as regards the test to be applied, in determining whether the sales did take place within the Province of Madras or not. On behalf of the appellant the contention raised was that the place of, sale in regard to all the transactions was Calcutta, as the property in the goods sold admittedly passed to the purchasers, in that city. The contention of the respondent State, on the other hand, was that the true test for determining the locality of the sale was not where the property in the goods sold passed, but where the actual transaction was put through. As the company had its head office in the city of Madras, its accounts were maintained there and the goods were delivered to the common carrier in that city, the sale, according to the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two-fold character. The learned counsel has argued in the first place that the Provincial Legislature functioning under the Government of India Act, 1935, was constitutionally incompetent to enact a legislation of this character which according to the interpretation put upon it by the High Court is capable of operating on sale transactions concluded outside the Province. The other contention is that on a proper construction of the relevant provisions of the Madras Sales Tax Act the High Court ought to have held that they do not authorise the imposition of sales tax in respect of a transaction of sale where property in the goods sold passes outside the Province. The first contention appears to us to be unsustainable. Section 100(3) of the G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bombay Sales Tax Act case(2) and its The State of Bombay & another v. United Motors (India) Ltd. & others-Civil Appeal No. 204 of 1952 since reported at p. 133 infra. propriety is beyond question. As a matter of fact, the legislative practice in regard to sales tax laws adopted by the Provincial Legislatures prior to the coming into force of the Constitution has been to authorise imposition of taxes on sales and purchases which were related in some manner with the taxing Province by reason of some of the ingredients of the transaction having taken place within the Province or by reason of the production or location of goods within it at the time when the transaction took place. If in the Madras Sales Tax Act the basis adopted for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ession "sale of goods" is a composite expression consisting of various ingredients or elements. Thus, there are the elements of a bargain or contract of sale, the payment or promise of payment of price, the delivery of goods and the actual passing of title, and each one of them is essential to a transaction of sale though the sale is not completed or concluded unless the purchaser becomes the owner of the property. The question is what element or elements have been accepted by the Madras Legislature as constituting a sale in the Province upon which it is the object of the statute to levy tax. Section 2 (h) gives the definition of "sale" and it is defined as meaning, "every transfer of the property in goods by one person to another in the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect thereof was made". It would be clear from this that these transactions were not consider- ed by the Legislature to constitute sales within the Province of Madras under the definition itself, but by resort to a legal fiction they were declared to be so, notwithstanding any provision in the Sale of Goods Act to the contrary which, it was assumed, would otherwise be applicable. The explanation further shows that in defining "sale" in Section 2(h), the Legislature had in mind a sale in the Province of Madras and as these words occur in the title and preamble of the Act it was not deemed necessary to repeat them in the definition or the charging section. Section 3 is the charging section in the Act and it provides for the levy of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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