N.U. Beg, J. - (1.) The short question that arises in this writ petition is as to how far the definition of "sale" in Section 2(h) of the U. P. Sales-tax Act, 1948 (U. P. Act No. XV of 1948), hereinafter called the Act, was ultra vires the Provincial Legislature. The petitioner in the writ petition is Sri Pratap Chand, a partner of the firm Messrs. Purshottam Das and Sons, Aminabad, LucKnow. He has been assessed to a turnover of Rs. 25,000/- for the year 1958-59 for the purpose of payment of sales tax under the Act by an order of Sri L.S. Kotwall, Sales-tax Officer III, Lucknow, dated the 25th September, 1961. The petitioner has prayed for a writ of certiorari quashing the order dated the 25th September, 1961, as well as for a writ of mandamus directing the Sales-tax Officer not to assess the petitioner in respect of the transactions which form the basis of the turnover. The modus operandi followed by the petitioner in respect of the transactions which have been made the subject-matter of the sales-tax was that various dealers used to supply gold ornaments to him, and, in lieu thereof, he used to give an equivalent weight of gold bullion of identical weight, he also paid some amount as labour charges. In the present case the assessment of the petitioner on the amount of Rs. 25,000/- is based on an estimated turnover of gold bullion at two hundred tolas for the period under assessment. In his order the Sales-tax Officer has stated as follows: "Purchases on Badlai System were admitted to have been made. In such transactions it has been held by the Judge (Revisions) that bullion given in exchange of purchase of ornaments is a sale." Following the above view of the Judge (Revisions) the Sales-tax Officer has passed the aforementioned order assessing the, petitioner on a turnover of Rs. 25,000/-. Dissatisfied with the said order the petitioner has filed the present writ petition with the abovementioned prayers. The opposite party No. 1 in the writ petition is the State of Uttar Pradesh, and the opposite party No. 2 is the Sales-tax Officer (3) Lucknow.
(2.) Before me the learned counsel for the petitioner has argued that in assessing the petitioner to sales tax on such transactions the Sales-tax Officer has applied the definition of "Sale" as given in Section 2 (h) of the Act Section 2 (h) of the Act defines "Sale" as follows:" Sale" means, within its grammatical variations and cognate expressions, any transfer of property in goods for cash, deferred payment or other valuable consideration but does not include a mortgage, hypothecation, charge or pledge." (Explanations omitted) The present case is not one of transfer of property in goods for cash nor is it a case of deferred payment. If at all, it is a transfer of goods for "other valuable consideration". So far as the addition of the words "or other valuable consideration" in the above definition is concerned the contention of the learned counsel for the petitioner is that it was ultra vires the Provincial Legislature. The Act was passed by the Provincial Legislature in the year 1948, and the relevant entry under which the Legislature was empowered to enact this legislation is contained in item No. 48 of List II in the Seventh Schedule of the Government of India Act, 1935. The said entry authorises the Provincial Legislature to levy "taxes on the sale of goods and on advertisements". The argument of the learned counsel for the petitioner is that in the above entry the term "sale of goods" is used in a restricted sense to cover only such sales as are made for monetary consideration. Having heard the learned counsel for the parties I am of the opinion that there is force in this argument. The Government of India Act, 1935, was enacted by the Parliament of England. It was the work of English draftsman. It is therefore, natural to presume that the term "sale" in entry No. 48 of List II of the Seventh Schedule was used in the same sense as was conveyed by it in English law. The law governing the sale of goods in England is contained in the Sale of Goods Act, 56 and 57 Vict. c. 71 which was passed in 1893. Sub-section (1) of Section 1 of the said Act states: "A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property In goods to the buyer for a money consideration, called the price. There may be a contract of sale between one part owner and another." The above definition of the term "sale" in English law gives a restricted meaning to it. Only such transactions of transfer of goods which are in lieu of money consideration are entitled to be termed "sale". If, therefore, the transfer of goods takes place for any other valuable consideration, i.e. consideration other than monetary consideration, it would not be a sale within the meaning of the term as used in English law.
(3.) The Indian Sale of Goods Act which is of the year 1930 appears to be substantially a reproduction of the above definition of "sale" in the English law. Section 4(1) of the Indian Sale of Goods Act lays down: "A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. There may be a contract of sale between one part-owner and another." Section 4 (3) of the Indian Sale of Goods Act provides as follows: "Where under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell." The term "price" is defined in Section 2 (1) of the Indian Sale of Goods Act as follows: "Price" means the money consideration for a sale of goods". Thus both according to the English as well as the Indian law, as existing in 1935, when the Government of India Act was promulgated, the expression "sale of goods" was confined only to such transactions as were effected for monetary consideration. Transactions for other valuable consideration were not included within the definition of the said expression either under the English law or under the Indian Law. In this context the expression "sale of goods" used in entry No. 48 of List I! in the seventh Schedule appended to the Government of India Act, 1935 should be interpreted to cover only such transactions of transfer of goods as are effected for money consideration, and not for any other valuable consideration.;