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TMI Blog1964 (6) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... the jaggery, the price and the total consideration and issue them to their principals. Out of this sale price, deductions are made towards commission varying from Rs. 3-12 nP. per cent. to Rs. 6-25 nP. per cent., gumasta rusum at Re. 0-2-0 per Rs. 100 and Kolagaram at Rs. 3 or Rs. 3-50 nP. per cent. for 100 maunds of jaggery. The pattis furnished to the principals make no reference either to the kolagaram at Rs. 1-8-0 per 100 maunds, dharmam at the rate of Re. 0-1-0 per 15 maunds, valtar at Re. 0-8-0 per cent., sales tax and cess of Re. 0-1-0 per every 15 maunds in case the purchaser is not a member of the Anakapalli Merchants' Association collected by the commission agents. The bills issued to the purchasers are said to recite that the sales tax to be collected from them will be made over to the Government. It appears from the order of the Assistant Commissioner that in most of the cases, the commission agents in fact did pay the sales tax to the Government and afterwards claimed refund on the ground that they were not liable to pay the sales tax on the jaggery sold by them, the responsibility in that behalf being that of the principals who must be deemed to have sold it to the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a buying agent and from the buying agent to his principal, if the agent is found in either of the cases aforesaid- (i) to have sold the goods at one rate and to have passed on the sale proceeds to his principal at another rate; or (ii) to have purchased the goods at one rate and to have passed them on to his principal at another rate; or (iii) not to have accounted to his principal for the entire collections or deductions made by him in the sales or purchases effected by him on behalf of his principal; or (iv) to have acted for a fictitious or non-existent principal:". Now, what is the connotation of the expression "goods are transferred"? Advantage is taken by the respondents of the fact that while the words used in the definition of sale are "transfer of the property in goods by one person to another". Explanation III employs the term "goods are transferred". On the basis of this difference in the language, an argument is built by the learned counsel for the respondents that unlike the definition contained in clause (n) of section 2, Explanation III is satisfied when there is a transfer of possession in the goods to the agent. Indisputably, two of the chief postulates of sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or. We are not persuaded that the structure of the explanation lends any support to the theory propounded on behalf of the respondents. That apart, the normal rule of construction is that an explanation does not enlarge the scope of the original section. We find no justification to depart from that normal rule. The principle of harmonious construction requires that we should not read an explanation in a way inconsistent with the content of the main section. A Division Bench of this Court (in Writ Petition No. 1404 of 1963 dated 16th April, 1964) considering this very expression held that the words "goods are transferred" bear the same connotation as the clause "transfer of the property in goods" and that the word "transfer" is not intended to convey the idea of delivery only without transfer of ownership. Another Division Bench of this Court in Venkatarami Naidu v. Suryanarayanamma [1960] 2 An. W.R. 181 at page 187. observed: "So long as the main definition remains untouched, the explanation cannot be construed in such a way which would have the result of making the main section incongruous with the explanation. The purpose of the explanation is not to delimit the scope of the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Explanation III in the way suggested by Sri Anantha Babu, we have to declare it as invalid for the reason that the power conferred by Entry 48 in List II of the Government of India Act (Entry 54 in List II of the Constitution) can be exercised only when there is a sale by which there is a transfer of ownership of property. The competence of a State Legislature does not extend to transactions which do not constitute sales as understood either in the Indian Sale of Goods Act or under the General Sales Tax Acts. We feel, therefore, that the content of the expression "sale" is not enlarged by Explanation III, as that explanation does not take in transactions which do not amount to sales as contemplated in the main definition. Further to bring it within the ambit of a sale, this transfer should satisfy one of the requisites enumerated in sub-clauses (i) to (iv). The learned counsel for the respondents maintains that the ingredient that is attracted to these cases, viz., not accounting to his principal for the entire collections or deductions made by him in the sale or purchase, is present in these cases, in that, the commission agents who collected the dharmam, kolagaram, valtar, sal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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