A. K. MATHUR, J. - (1.) IN all these writ petitions a common question of law is involved, therefore they are disposed of by a common order. For the convenience of disposal of these writ petitions, facts of S. B. Civil Writ Petition No. 402 of 1985 : Rajasthan Spinning and Weaving Mills Ltd. (Unit Bhilwara) v. Commercial Taxes Officer, Special Circle, Udaipur and Another are taken into consideration. The petitioner-company by this writ petition has challenged that definition of "sale" as contained in section 2 (o) of the Rajasthan Sales Tax Act, 1954 (hereinafter referred to as the Act of 1954), may be declared as ultra vires and invalid. It has also prayed that section 3 (2) (a) of the Rajasthan Sales Tax (Amendment) Act, 1960 may also be declared ultra vires and may be struck down, being violative of articles 19 (1) (g), 301 and 304 of the Constitution.
(2.) THE petitioner, M/s. Rajasthan Spinning and Weaving Mills Ltd. , is a public limited company and owns two textile units, (i) one at Gulabpura (Kharigram) (District Bhilwara) and (ii) another at Bhilwara. Both the said textile units are owned by one and the same owner, i. e. , the petitioner-company. THE registered office of the petitioner-company is situated at 40-41, Community Centre, New Friends Colony, New Delhi. It is submitted that the ownership of both the said textile units i. e. , M/s. Rajasthan Spinning & Weaving Mills Ltd. , Bhilwara, as well as M/s. Rajasthan Spinning & Weaving Mills Ltd. , Gulabpura (Kharigram) (District Bhilwara), vest in one and the same person, i. e. , the petitioner company, and though the two units owned by the petitioner are situated at two different places in the Rajasthan in the same District Bhilwara. Both the units have been registered under the Act of 1954. Every dealer is required to pay tax under the Act of 1954 and is required to register himself in the prescribed manner. Both the units are also registered under the Central Sales Tax Act also. M/s. Rajasthan Spinning and Weaving Mills Ltd. , Bhilwara, has been registered under R. S. T. No. 189/62 and under C. S. T. No. BHL 704. M/s. Rajasthan Spinning and Weaving Mills Ltd. , Gulabpura (Kharigram), District Bhilwara, has been registered under R. S. T. No. 1703/67 and under C. S. T. No. BHL/85/63. It has been submitted that the Bhilwara unit of the petitioner-company transfers yarn (which is manufactured at Bhilwara) to Gulabpura (Kharigram) unit and the yarn so transferred from Bhilwara to Gulabpura is used in manufacture of cloths or sold after some process. Likewise Gulabpura unit of the petitioner-company also transfers terene fibre and some time yarn also to Bhilwara unit of the petitioner-company. THE question that has been posed before me is that whether these gods which are transferred by same owner from his one unit to another unit amounts to sale or not. THE non-petitioner No. 1 issued a notice on 18th February, 1985, stating that the transfer of yarn and terene fibre from the Bhilwara unit of the petitioner-company to the Gulabpura unit of the petitioner-company amounting to Rs. 84,77,818 was liable to be taxed treating the same as sale and also interest and why proceedings under sections 5c (2) and 5cc (2) be not taken against the petitioner-company. THE petitioner-company aggrieved against this has filed the present writ petition and has challenged the validity of the provisions of the Act and has submitted that such transaction does not amount to sale. A return has been filed by the respondent and Mr. Bhandari, learned counsel for the respondent, has raised a preliminary objection that the present writ petition is premature and the question regarding validity of section 2 (o) of the Act of 1954 cannot be examined in this case as a notice has only been given to the petitioner to show cause that the petitioner's units are owned by one person or by different persons. Mr. Bhandari has further submitted that from the evidence which is available on record in these writ petitions there is a prima facie evidence to show that both the units are separate and they are not owned by one owner. In order to substantiate the contention Mr. Bhandari invited my attention to the registrations of both the units under the Act of 1954 and he submits that it has been clearly mentioned in the application for registration that there is no additional place of business and they have no interest in other business in India. A copy of the application submitted by the petitioner-company for registration under the Act of 1954 has been placed on record as exhibit R/1. Similarly the petitioner applied for registration under section 7 (1) and 7 (2) of the Central Sales Tax Act in which it has been clearly stated that the principal place of business in Rajasthan is at Bhilwara. It has also been mentioned that it has no other place of business or warehouse in the State of Rajasthan. Copy of the application has been placed on record as exhibit R/2. Similarly regarding Gulabpura unit documents have been placed on record as exhibit R/3 and exhibit R/4 to substantiate this submission. Similarly both the units have independently availed the benefit of section 5 (c) of the Act of 1954 and both the units have obtained copies of declaration under rule 25c from time to time and used them. It has been further submitted that in order to accelerate industrial development under the provisions of section 5cc of the Act of 1954 the State Government had exempted from payment of tax for a period of five years from the date of the commissioning of the unit from 1st March, 1970, to all registered dealers. This concession was not available to units using machinery not already used or acquired for use in any other factory in Rajasthan or established on the site or existing factory manufacturing the same goods. This exemption was availed for a period of five years by the Rajasthan Spinning and Weaving Mills Ltd. , Kharigram unit, therefore when the petitioner-company treated Kharigram unit as independent unit and obtained exemption. It cannot now turn back and say that both the units are owned by one person and transfer of goods by one unit to another does not amount to sale. It has further been submitted that benefit under sections 5c and 5cc is available to the registered dealer for use by him the raw material and the raw material purchased under the provisions of sections 5c and 5cc cannot be transferred by one registered dealer to other registered dealer. From these facts, Mr. Bhandari assails that the transfer of goods by one unit to another amounts to sale or not this question can only be decided after necessary evidence has been produced by both the parties before the assessing authority and the assessing authority may record his finding that whether there is a common ownership of these units or not and such can be effected between two units without attracting the definition of "sale" as defined under section 2 (o) of the Act of 1954. Mr. Maheshwari, learned counsel for the petitioners, has submitted that entry 54 of the Seventh Schedule, List II, deals with the taxes on the sale or purchase of goods other than newspapers, subject to the provisions of entry 92-A of List I. He submits that by virtue of this entry the State Legislature is competent to legislate on the subject. He further invited my attention to the definition of "sale" as given in the Sale of Goods Act. On that basis he submits that definition of "sale" which has been given under section 2 (o) is more wider than the definition given in the Sale of Goods Act. Section 2 (o) of the Act of 1954 reads as under : " (o) 'sale' with all its grammatical variations and cognate expressions, means any transfer of property in goods [ (by one person to another)] for cash or for deferred payment or for any other valuable consideration, and includes a (transfer if property in goods on hire-purchase) or other system of payment by installments, 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); Explanation-I.- A transfer of property in goods shall include such transfer made in the course of the execution of a contract. Explanation-II.- A transfer of property in goods shall be deemed to have been made within the State if it fulfils the requirements of sub-section (2) of section 4 of the Central Sales Tax Act, 1956 (Central Act 74 of 1956 ). " This definition was amended by the amending Act 18 of 1960 with effect from 1st April, 1960. By this amendment the words "made within the State" along with the words "by one person to another" was omitted by this Act. He has also invited my attention to the definition of "sale" as given in the Sale of Goods Act, which reads as under : " 4. Sale and agreement to sell.- (1) 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. (2) A contract of sale may be absolute or conditional. (3) 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. (4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred. " It has been established by a series of decisions of their Lordships of the Supreme Court that the definition of "sale" given in the Sales Tax Act cannot be more wider than the definition given in the Sale of Goods Act. In this connection he has invited my attention to the cases of Sales Tax Officer, Pilibhit v. Budh Prakash Jai Prakash [1954] 5 STC 193 (SC); AIR 1954 SC 459, State of Madras v. Gannon Dunkerly & Co. (Madras) Ltd. [1958] 9 STC 353 (SC); AIR 195 SC 560, Bhopal Sugar Industries v. D. P. Dube [1963] 14 STC 406 (SC); AIR 1964 SC 1037, K. L. Johar & Co. v. Deputy Commercial Tax Officer [1965] 16 STC 213 (SC); AIR 1965 SC 1082, Deputy Commercial Tax Officer v. Enfield India Limited [1968] 21 STC 317 (SC); AIR 1968 SC 838 and Sales Tax Officer, Navgaon v. Timber and Fuel Corporation, Tikamgarh [1973] 31 STC 585 (SC); AIR 1973 SC 2350. On the basis of these series of decisions of their Lordships of the Supreme Court that the definition of "sale" given in section 2 (o) of the Act of 1954 is ultra vires and it runs counter to the basic ingredient of sale. He further submits that by virtue of this definition given in the Sale of Goods Act that transfer of goods by same owner to himself will not amount to sale and therefore the definition of "sale" given in the Act of 1954 is void and should be struck down being violative of articles 19 (1) (g), 301 and 304 of the Constitution. Suffice it to say that it will be futile exercise to deal with all cases individually as all these cases have been considered by subsequently judgment given by their Lordships of the Supreme Court in the case of Vishnu Agencies (Pvt.) Ltd. v. Commercial Tax Officer [1978] 42 STC 31 (SC); AIR 1978 SC 449 and after considering over all the cases on subject-matter their Lordships have observed as under : " A transaction which is effected in compliance with the obligatory terms of a statute may nevertheless be a sale in the eye of law, so long as mutual assent, express or implied, is not totally excluded. "
(3.) IN order to constitute "sale" as contemplated by entry 54 of List II of the Seventh Schedule, their Lordships of the Supreme Court has discussed in detail in Vishnu Agencies case [1978] 42 STC 31 at 46 (SC); AIR 1978 SC 449 in paragraph 30, which read as under : " 30. The view expressed in Gannon Dunkerly [1958] 9 STC 353 (SC); AIR 1958 SC 560 that the words 'sale of goods' in entry 48 must be interpreted in the sense which they bear in the Sale of Goods Act, 1930, and that the meaning of those words should not be left to fluctuate with the definition of 'sale' in laws relating to sales of goods which might be in force for the time being may, with respect, bear further consideration but that may have to await a more suitable occasion. It will then be necessary to examine whether the words 'sale of goods' which occur in entry 48 should not be construed so as to extend the competence of the legislature to enacting laws in respect of matters which might be unknown in 1935 when the Government of INdia Act was passed but which may have come into existence later, as a result of a social and economic evolution. IN Attorney-General v. Edison Telephone Company of London (1880) LR 6 QBD 244 a question arose whether the Edison Telephone Company, London, infringed by installation of telephones, the exclusive privilege of transmitting telegrams which was conferred upon the Postmaster-General under an Act of 1869. The decision depended on the meaning of the word 'telegraph' in the Acts of 1863 and 1869. The company contended that since telephones were unknown at the time when those Acts were passed, the definition of 'telegraph' could not comprehend 'telephones'. That contention was negatived by an English Court. IN Regulation and Control of Radio Communication in Canada, IN re [1932] AC 304 a similar question arose as to whether 'broadcasting' was covered by the expression 'telegraph and other works and undertakings' in section 92 (10) (a) of the Constitution Act of 1867. The Privy Council answered the question in the affirmative and was apparently not impressed by the contention that broadcasting was not known as a means of communication at the time when the Constitution Act was passed. These decisions proceed on the principle that if after the enactment of a legislation, new facts and situations arise which could not have been in the contemplation of the legislature, statutory provisions can justifiably be applied to those facts and situations so long as the words of the statute are in a broad sense capable of containing them. This principle, according to the view expressed in Gannon Dunkerly [1958] 9 STC 353 (SC); AIR 1958 SC 560 did not apply to the interpretation of entry 48, a view which, in our opinion, is capable of further scrutiny. It is, however, unnecessary in these appeals to investigate the matter any further because, the position which emerges after putting on the words of entry 48 the same meaning which those words bear in the Sale of Goods Act, 1930, is that, in order to constitute a sale, it is necessary that there should be an agreement between the parties. IN other words, the effect of the construction which the court put on the words of entry 48 in Gannon Dunkerley [1958] 9 STC 353 (SC); AIR 1958 SC 560 is that a sale is necessarily a consensual transaction and, if the parties have no volition or option to bargain, there can be no sale. For the present purposes, this view may be assumed to reflect the correct legal position but even so, the transactions which are the subject-matter of these appeals will amount to sales. " The gist of the whole matter is that in order to constitute a sale as contemplated under entry 54 of List II of the Seventh Schedule it is necessary that there should be an agreement between the parties. The sale is necessarily a consensual transaction and if the parties have no volition or option to bargain, there can be no sale. Keeping in view the proposition which has been laid down by this celebrated judgment and after having been considered the earlier celebrated judgment given by their Lordships of the Supreme Court in the case of Gannon Dunkerley [1958] 9 STC 353 (SC); AIR 1958 SC 560, the question is that definition of the Rajasthan Sales Tax Act can be said to be violative of articles 19 (1) (g), 301 and 304 of the Constitution, my answer to this question is in negative. The construction which the learned counsel wants to put that this definition of "sale" is more wider than the definition of "sale" as given in the Sale of Goods Act it is contrary to the common parlance. It is no doubt that so far as sale is concerned, there has to be a consensual transaction between the two parties and it the parties have no volition or option to bargain then such transaction will not amount to sale. A bare reading of section 2 (o) clearly shows that the Rajasthan Act or the Amendment Act has not in any way transgress the limit of the definition of "sale" as given in the Sale of Goods Act as is commonly understood in normal parlance. It clearly says that with all its grammatical variations and cognate expressions means any transfer of property in goods for cash or for deferred payment or for any other valuable consideration and includes a transfer of property in goods on hire-purchase or other system of payment by installments, but does not include a mortgage or hypothecation of or a charge or pledge on goods. Thus what is contemplated is that a transfer of goods for valuable consideration. The definition of "sale" in the Sale of Goods Act also says that there should be a contract and the property in goods is transferred from the seller to the buyer, the contract is called a sale. Thus, it cannot be said that by any stretch of imagination that the definition given in the Act of 1954 runs counter to the definition of "sale" given in the Sale of Goods Act, or violates article 19 (1) (g) or article 301 or article 304 of the Constitution. The definition of "sale" given in section 2 (o) of the Act of 1954 is valid, as such the contention of the petitioner is rejected. Since the learned counsel for the petitioner apart from this legal question has also raised a question that the present transaction between Gulabpura (Kharigram) unit to Bhilwara unit amounts to sale or not. It is essentially a question of fact. It is an admitted fact that both the units have been separately registered as dealer under the Rajasthan Act or under the Central Act and they have been assigned separate registration number. The learned counsel for the petitioner emphasised that in fact both the units are owned by one person and as such by transferring goods by one unit to another does not amount to sale. In this connection he has invited my attention to the cases of Moni Prosad Singh v. State of West Bengal [1977] 39 STC 131 (Cal), U. P. State Cement Corporation Ltd. v. Commissioner of Sales Tax, U. P. [1979] 43 STC 476 (All.) and Commissioner of Sales Tax v. Indokem Private Limited [1975] 35 STC 432 (Bom ). Though each case has its own peculiar facts and I shall deal them hereinafter. ;