SALES TAX OFFICER PILIBHIT Vs. BUDH PRAKASH JAL PRAKASH

JUDGEMENT

(1.) This is an appeal by the Sales Tax Officer, Pilibhit, against the judgment of the High Court of Allahabad granting firstly, a writ of 'certiorari' quashing certain assessment orders made against the respondent, and secondly, a writ of prohibition in respect of certain other proceedings for assessment of tax under the provisions of the U. P. Sales Tax Act (Act XV of 1948). The respondent is a firm doing business in forward contracts, and was assessed in respect of such contracts to a tax of Rs. 1,082-8-0 for the year 1948-1949 by an order dated 27-2-1950, Ex. A, and to a tax of Rs. 7,369 for the year 1949-1950 by an order dated 23-5-1950, Exhibit B. For the period, 1-4-1950 to 31-1-1951, the respondent paid a sum of Rs. 845-4-0 as tax. Assessment proceedings were also started by the appellant in respect of certain forward contracts relating to gur and peas. The respondent challenged the legality of these proceedings and of the assessment orders on the ground that the Act in so far as it imposed a tax on forward contracts was 'ultra vires' the powers of the Provincial Legislature. The learned Judges agreed with this contention, and issued a writ of 'certiorari' quashing the orders of assessment, Exhibits A and B and a writ of prohibition in respect of the proceedings for assessment of tax on forward contracts in gur and peas. The matter now comes before us in appeal under a certificate of the High Court under Article 133 (1) of the Constitution.

(2.) Under the Government of India Act, 1935, the Provincial Legislature derived its power to impose a tax on the sale of goods under Entry 48 in List II of the Seventh Schedule, and the U. P. Sales Tax Act XV of 1948 was enacted in exercise of this power. Section 2(h) of the Act defines "sale" as follows:

(3.) Under the statute law on the subject, a sale of goods and an agreement for the sale of goods are treated as two distinct and separate matters. Section 4 of the Indian Sale of Goods Act (Act III of 1930) runs as follows: