BHANDARI, J. - (1.)ALL these three references under sec. 15 of the Rajasthan Sales Tax Act, 1954 (hereinafter called the Act) raise similar questions of law and are, therefore, disposed of by one judgment.
(2.)WE first of all take up Sales Tax Reference No. 41/67 Mewar Sugar Mills Ltd vs. State of Rajasthan.
Messrs. Mewar Sugar Mills Ltd (hereinafter called the Sugar Mills) is a public limited company carrying on business of manufacturing and selling sugar. The accounting year of the Sugar Mills begins from 1st August and ends on 31st July This reference relates to the assessment proceedings for the assessment years 1957-58, 1958-59 and 1959-60 For the first two years the Sugar Mills was assessed by the Sales Tax authorities of the State of Rajasthan both under the provisions of the Act and also under the provisions of the Central Sales Tax Act. For the assessment year 1959 60, it was assessed only under the provisions of the Act. Thus there were five assessment proceedings undertaken with respect to the aforesaid three years.

It may be mentioned that sugar was a controlled commodity and under the Sugar and Gur Control Order, 1950 the notification No. SRO 57, dated 29th January 1951 was issued in which it was made obligatory for the mills to supply and deliver sugar in specified packings, the net contents of each packing was to be 2 mds 30 srs. This notification was replaced by another similar notifications which we need not mention. Price of sugar was fixed by the Government of Rajasthan from 29th August, 1959 in relation to the weight of the sugar. Prior to 14th December 1957, the Sugar Mills made sales of sugar and charged price from the purchasers in accordance with the price fixed on the quantity of sugar sold. On or from 14th December, 1957 additional Central Excise duty was levied on sugar and sugar was exempted from State Sales-tax. On and from that date it sold sugar at the price fixed by the State of Rajasthan which was computed on the weight of sugar sold by it. Sugar was sold in the gunny bags but the case of the Sugar Mills is that no price was charged for the gunny bags.

The Assistant Commissioner Excise and Taxation, District Udaipur assessed the Sugar Mills for the accounting year 1957-58 and did not charge any sales-tax on the value of the gunny bags supplied by it to its different customers. Notice under sec. 10 (2) of the Act was, however, issued to the Sugar Mills and the assessment was reopened on the ground that the assessee had escaped tax on the value of gunny bags in which sugar was delivered. The Sales-tax Officer held that it had paid tax on the sale price of the sugar upto 13th December, 1957 which also included value of gunny bags. But from 14th December, 1957 tax on the sale of sugar was exempted and only the containers remained taxable. On this basis the Sugar Mills was taxed on the value of the gunny bags which he determined at rupee one per bag and assessed tax on it at the rate provided for the Bardana under the Act. For the next two years, namely accounting years 1958-59 and 1959 60 the Sugar Mills was similarly assessed on the value of the gunny bags supplied by it to its various customers. The Mills filed separate appeals for the three years in question to the Deputy Commissioner (Appeals) Excise and Taxation, Jodhpur and the appe-als were dismissed. The Mills filed revision applications under sec. 14 of the Act to the Board of Revenue, Rajasthan. The single Member of the Board who heard the applications referred all the cases to a Full Bench.

Various rulings have been discussed by the Full Bench of the Board of Revenue in its judgment, but there is no clear finding of fact on the question whether under the circumstances of the case, there was any sale of gunny bags by the Mills to its customers or not. After discussing the cases, the Full Bench observed as follows : "in this case (of) Mewar Sugar Mills there is no doubt a Sugar Control Order imposed all sorts of obligations for the sale of sugar in specified gunny bags and of certain weight, yet the main contract of the assessee for the sale of sugar consists in supplying of sugar with gunny bags the price of which goods was no doubt included in the turnover of the assessee. No person would supply free of charge a commodity which has some value. There would be an implied agreement in this case that along with sugar, the gunny bags were sold for value to other persons by the assessee. "a case may happen, where an article is sold in ordinary paper bags of practically little value, then it cannot be inferred that the sale of material between the parties was also contemplated. It usually happens when one buys goods in a shop, where they are delivered to customers in ordinary paper wrappers. In such cases it can be presumed that no sale of the packing materia] has taken place. But looking to the trend of the cases cited by the learned Government Advocate, it has been the consistent view of the various High Courts that in the case of goods delivered in gunny bags, the latter were considered as sold along with the commodity, and the assessee was held liable to the payment of sales tax. The contract of sale in those cases is therefore implied. We are therefore, of the opinion the reference made by the learned single Member be answered in the terms, that the delivery of sugar made by the assessee company is with gunny bags and the sale of latter commodity is implied in it, and remand this case back to the learned single member to decide it in accordance with the above answer. "

After the receipt of the case, the single Member of the Board of Revenue dismissed the revision applications.

Five separate applications were preferred by the Mills under sec. 15 of the Act. On these applications the Board of Revenue has referred the following question : "whether in the facts and circumstances of these two cases, where sugar is sold packed in bardana, an implied sale of bardana can be inferred". We understand that by two cases, the Board of Revenue meant all the five cases of two categories - (1) that arising under the Rajasthan Sales Tax Act and (2) those arising under the Central Sales Tax Act.

In order to answer this question, we may refer to certain provisions of the Act. "sale" has been defined under sec. 2 of the Sales Tax Act as follows : "sale", with all its grammatical variations and cognate expressions means transfer of property in goods for cash or for deferred payment or for any other valuable consideration, and includes a transfer of goods on the hire purchase or other system of payment by instalment, but does not include a mortgage or hypothecation of, or a charge or pledge on goods 'and the word 'purchase' or 'buy' shall be construed accordingly. " "sale price" means amount payable to a dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade, but inclusive of any sum charged for any thing done by the dealer in respect of the goods at the time or before the delivery thereof other than the cost of freight or delivery or the cost of installation in case where such cost is separately charged "and the expression "purchase price" shall be construed accordingly. " "turnover" means the aggregate of the amount of sale prices received or receivable by a dealer in respect of the sale or supply of goods or in respect to the sale or supply of goods in the carrying out of any contract. "

The charging section under the Act is sec. 3 which makes a dealer liable to pay tax on his taxable turnover.

The definition of "sale" under the Act is much wider than its ordinary legal connotation. In the well-known case of The State of Madras vs. Gannon Dunkerley and Co. (Madras) Ltd (l), the Supreme Court while discussing the provisions of the Government of India Act, 1935 has taken the view that the expression 'sale of goods' in Entry 48 in List II of Schedule VII is a nomen juris, its essential ingredients being an agreement to sell movables for a price and property passing therein pursuant to that agreement. The same view has been taken by the Supreme Court with respect to the provisions of the Constitution Viz Entry No. 54 in List II of Schedule VII of the Constitution, The Supreme Court has again pointed out that sale of goods in the various Acts of the States regarding the sales-tax must have the same meaning which it had in the Act of 1930. It has also been pointed out in a number of cases that to constitute sale of goods, three essential elements must be fulfilled On this point, it is sufficient if we quote the following passage from Commissioner of Taxes, Assam vs. Prabhat Marketing Co. Ltd (2) : "it is well-established that in order to constitute a. sale it is necessary that there should be an agreement between the parties for the purpose of transferring title to goods, the agreement must be supported by money consideration, and that as a result of the transaction the property should actually pass in the goods. Unless all the ingredients are present in the transaction there could be no sale of goods and sales tax cannot be imposed " While considering the question, what are the characteristics of sale under the Rajasthan Sales Tax Act, the Supreme Court has taken the same view in the State of Rajasthan vs. M/s Karamchand Thappar and Brothers Ltd. (3) and observed as follows : "this Court in State of Madras vs. Ganon Dunkerley & Co. (Madras) (1959 SCR 379) held that to render turnover from sale of goods liable to tax under the Sales Tax Acts, there must be concurrence of four elements in the sale (1) parties competent to contract; (2) mutual assent of the parties; (3) thing absolute or general, property in which is transferred from the seller to the buyer; and (4) price in money paid or promised. "

In the present case, the title to the gunny bags which were the property of the Sugar Mills, no doubt, passed to the various customers. But this by itself has never been treated as constituting sale the two other elements as referred to in Prabhat Marketing Go's case (2) must be further present. This has been pointed out by their Lordships of the Supreme Court in the majority judgment in the Government of Andhra Pradesh vs. Gantur Tobaccos Ltd (4) in which it was observed : "one fundamental fact has to be borne in mind is that from the mere passing of title to goods either as integral part or independent of goods, it cannot be inferred that the goods were agreed to be sold and the price was liable to sales-tax. "

It was also held by their Lordships of the Supreme Court that in the case of the containers as well as in the case of the works contract it is for the taxing department to sho\v that a particular transaction amounted to sale.

(3.)IN Hyderabed Deccan Cigarette Factory vs. State of Andhra Pradesh (5), the Department sought to assess a manufacturing dealer of cigarettes on the turnover in respect of packing materials consisting of cardboard and dealwood. Their Lordships of the Supreme Court pointed out whether there was an agreement to sell the packing materials was a pure question of fact and that question could not be decided on fiction or surmises. The burden lay on the Commercial Tax Officer to prove that the turnover was liable to tax and he could ask the assessee to produce relevant material. If the assessee did not produce the same, he could draw adverse inferences against the assessee but he had to decide the crucial question whether the packing materials were the subject of the agreement of sale, express or implied.
It is the case of neither party in these cases that there was any express agreement to sell the bags by the Mills to its customers. We have to see whether there were circumstances present in this case showing such an implied agreement. Under what circumstances, an implied agreement is to be inferred is essentially a question of fact which it is for the Taxing authorities to determine on the facts and circumstances of each case. This question cannot be resolved by stating any abstract proposition of law. As pointed out by their Lordships of the Supreme Court a simple question of fact cannot be sidetracked by copious citation, an error in which we regret to point out. the Full Bench of the Revenue Board has fallen.

When the circumstances show that particular goods were to be supplied by a dealer packed and the price fixed is inclusive of the packing material, an inference may be readily drawn that packing material was impliedly sold.

In S. M. Chidambara Nadar Sons and Co. vs. State of Madras (6) where there was an agreement to purchase cotton to be delivered by the seller to the buyer, it was implicit in the contract that the goods should be delivered as packed. In such a case a contract to pay for and purchase the packing materials was held to be implied. This case was expressly approved by Subba Rao J. in his dissenting judgment in the Government of Andhra Pradesh vs. Guntur Tobaccos Ltd. (supra ).

Learned counsel for the Sugar Mills has however argued that in the circumstances of the case, there could be no other conclusion from the material on record except that the gunny bags were never intended to be sold by the Sugar Mills to its various customers. He primarily relied on the fact that in the accounting year 1957-58 when there was no exemption of sugar from sales-tax and even earlier than that the Sugar Mills had been selling sugar and always the taxing authority was taxing it on the price which the sugar brought and not on the value of the gunny bags in which sugar was delivered by the Sugar Mills to its customers. According to the learned counsel, this shows that consistently the Sugar Mills were making a present of a gunny bag to a customer who purchased one bag of sugar. The Sugar Mills never intended to sell the bags and the Department never treated the transfer of a gunny bag from the sugar mills to the customer as a transaction of sale. He has pointed out that the price of sugar was settled not on the basis of the gunny bag of sugar but on the basis of per maund of sugar and that in the bills the Sugar Mills never charged the price of the gunny bags. He has further pointed out that it was only after the notification for exempting sugar from sales-tax was issued that the taxing authorities took into their head to tax the value of the gunny bags, but this should not have been done as the exemption did not alter the character of transactions of sale. He has further contended that unless a price is charged for the transfer of a particular commodity, there can be no sale because the second condition as envisaged in the case of Prabhat Marketing Co is that the agreement must be supported by money consideration. In this connection, he has also relied on the following observation of the Supreme Court in the Government of Andhra Pradesh vs. Guntur Tobaccos Ltd (4) (Supra ). "the contract may be for work to be done for remuneration and for supply of materials used in the execution of the works for a price; it may be contract for work in which the use of the materials is accessory or incidental to the execution of the work; or it may be a contract for work and use or supply of materials, though not accessory to the execution of the contract, is voluntary or gratuitous. In the last class there is no sale because though property passes it does not pass for a price. "

These observations, it is contended, apply with greater emphasis to a case where the contract is simply a contract for supply of goods.

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