TMI Blog1957 (11) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... issue bags to retailers at the price paid by them. The bags will be marked by the provincial reserve staff and the same bags shall be utilised by the miller for filling atta with the exception that the additional bags required (as bag of wheat will contain 2 maunds, 28 seers and 14 chhatanks of grain and a bag of atta will contain 2 maunds of atta some additional bags will be required to accommodate the extra quantity of atta) shall be provided by the authorised wholesale distributors from his own stock should the retail distributors not bring their own bags for exchange and charged for at the same rate as for provincial reserve bags." In pursuance of the terms of the agreement the petitioners transferred large quantities of flour to depot-holders, recovering the price of the flour as well as of the bags from the depot-holders concerned. On the 28th August, 1953, the Excise and Taxation Commissioner held (1) that as the petitioners had purchased both the wheat and bags from Government they had become the owners thereof; and (2) that as they had recovered the price of the wheat and bags plus their profits (denominated as milling margin) from depot-holders there was a transfer of pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "sale" as defined in the Act of 1948 means "any transfer of property in goods for cash or deferred payment or other valuable consideration, including a transfer of property in goods involved in the execution of a contract." The legislative definition of the expression "sale" as embodied in the Act of 1948 must take precedence over definitions which may be found in dictionaries or other legal enactments, and it seems to me therefore that if the Court entertains the view that there has been a transfer of property for a price the requirements of the Sales Tax Act are satisfied even though the transaction on which the tax is levied may not meet the technical requisites of a sale under other enactments. The learned counsel for the petitioners frankly admits that although his clients are liable to pay the sales tax on the sale of gunny bags purchased by them from the open market and sold by them to depot-holders in pursuance of the provisions of the contract, they are not liable to pay any sales tax on the gunny bags supplied to them by Government at a fixed price and transferred by them to depot-holders at the same price. It is argued that the petitioners could have had no object in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o assistance in the decision of the controversy which has arisen before us, for the Punjab Act contains no provision analogous to section 8 of the Madras Act. In Nimar Cotton Press, Khandwa v. Sales Tax Officer, Khandwa [1954] 5 S.T.C. 428., the petitioners carried on business of pressing ginned cotton. They pressed the cotton supplied by customers for a fixed payment per bale and delivered it in pressed bales covered with hessian and tied with iron hoops which kept the pressed cotton in position. A question arose whether the hessian and iron hoops used for packing the bales were sold by the assessee. The Nagpur High Court held that if hessian and iron hoops were supplied by the owners of cotton there was no transfer of ownership of hessian and iron hoops from the petitioner to his clients, but if this material was supplied by the petitioner a question might arise whether there was any sale of this material. This case brings out clearly the distinction between a case where the material is supplied by the owner and the case where it is supplied by the assessee. In Sree Meenakshi Mills Ltd. v. State of Madras [1954] 5 S.T.C. 291., the assessees were under a duty under section 46 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by him. It was contended on behalf of the State that the plaintiff was purchasing goods from the import dealers and then effecting sales to retailers and he was, therefore, a dealer under the Madras General Sales Tax Act, 1939. The Madras High Court held that the plaintiff acted only as an agent and could not therefore be treated as a dealer within the definition of the Act. If he was not a dealer, it is obvious that the transactions to which he was a party could not be taxed as sales. We have been called upon to decide whether the supply of gunny bags is a sale: not whether the petitioners are dealers. In determining whether a particular transaction is taxable as a sale, the Court should endeavour to ascertain the intention of the Legislature by applying the usual rules of statutory construction. If the words of the statute are clear and unambiguous nothing more needs to be done than to construe them in their usual and popular sense. If, however, the words leave room for doubt or ambiguity, the legislative intent should be gathered from a consideration of the entire statute, the Court giving effect to every word the statute contains by giving it a rational, sensible and liberal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearly in the affirmative. The essence of a contract under the East Punjab Rationing Order, like any other contract, is agreement. In deciding whether there has been an agreement and what its terms are, the Court looks for an offer to do or forbear from doing something by one party and acceptance of that offer by the other party turning the offer into a promise. If this promise is supported by a consideration the contract is complete. There is consideration where "an act or forbearance of one party or the promise thereof is the price for which the promise of the other is bought": Dunlop v. Selfridge[1915] A.C. 847; 855 H.L. The State Government in the present case offered to appoint the petitioners as authorised wholesale distributors on certain terms and conditions and the petitioners accepted those terms. According to clause 8 of the agreement the petitioners were to pay the price of the bags to Government at the rate fixed by Government from time to time and were to transfer these bags to depot-holders at the same price. The execution of this term of the agreement involved the petitioners in two separate and distinct transactions-(a) a purchase by the petitioners of a number ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are not engaged in the sale of gunny bags, that they do not sell gunny bags as such, that the depot-holders are at liberty to buy flour alone and that they are under no obligation to buy the bags. According to them it is as necessary to keep flour in bags when transported in considerable quantities as to keep a liquid in a container if it is to be available for use. It is accordingly contended that the price of gunny bags used for the transport or storage of flour should de deemed to form part of the price of the atta in the same way as the cost of purchasing, milling, transporting and all other expenses incurred in placing wheat flour in the market enter into the ultimate price of this non-taxable commodity. This argument appears to me to be wholly devoid of force. It may be that the petitioners are not engaged in the sale of gunny bags and that they do not sell gunny bags as such, but it must be remembered that they sell flour for one price and the bags for another. They claim and state a separate rate for bags which is equivalent to the price specified by Government. Moreover, the bags remain tangible personal property after they are filled by the petitioners and resold as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oposes to make an order which is likely to affect any person adversely. The expression "adverse" is defined as "opposite, hurtful, unfavourable" and the expression "prejudicial" means "harmful", "hurtful", "injurious", "disadvantageous". An order made by the Commissioner under section 33 of the Income-tax Act can only be said to be prejudicial to the assessee when he is as a result of it in a different and worse position than that in which he was placed by the order in review: Commissioner of Income-tax, West Punjab v. The Tribune Trust, Lahore[1948] 16 I.T.R. 214; A.I.R. 1948 P.C. 102. No person has a vested right to be heard before an order refusing to exercise discretionary jurisdiction is passed (Bhagwan Das v. The Province of Bihar, Miscellaneous Judicial Case No. 260 of 1947. [1949] 1 S.T.C. 234.) This question must be answered in the negative. A subsidiary question has also been raised, namely that even though the particular transactions in respect of which the tax is sought to be imposed fall within the ambit of the expression "sale" the petitioners cannot be required to pay the tax as they do not fall within the purview of the expression "dealer". Mr. Goswami contends th ..... 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