1. This and the connected writ petitions can be conveniently disposed of by a common order as they are by the same petitioner and raise the same question arising out of identical set of facts.

2. The petitioner is a limited company engaged in the manufacture and sale of sugar. The common question involved in this group of writ petitions is as to whether the value of gunny bags in which sugar is packed can be subjected to sales tax when the turnover of sugar itself is exempt.

3. It is the case of the petitioner and the same has not been denied that the petitioner-company, like all other manufacturers of sugar, utilises gunny bags as packing material. The sugar is always packed in gunny bags before it is stored or is offered for sale. At no time sugar is kept loose as otherwise the quality, grade and colour of sugar deteriorate. The petitioner further states that no extra or separate charge is made from the purchasers on account of the supply of sugar bags. It is further stated that sugar is always sold in that condition and is never sold in bulk or loose, nor is any rebate allowed to a purchaser who may offer to return the gunny bags or to supply his own gunny bags.

4. Previously the turnover of sugar was liable to sales tax both under the U.P. and the Central Sales Tax Acts. By a Notification No. ST/4485/X, dated 14th December, 1957, issued under Section 4(1)(b) of the U.P. Sales Tax Act the turnover of certain articles was exempted from levy of sales tax, if additional Central excise duty was leviable on those articles and proof was furnished of the additional excise duty having been paid. Sugar is one of such items upon which the additional Central excise duty was leviable.

5. In respect of the assessment years 1961-62 to 1963-64 regular assessments were made both under the UP. and the Central Sales Tax Acts exempting the turnover of sugar from payment of tax. No tax was levied on the value of the gunny bags either. Subsequently, proceedings under Section 21 of the U.P. Sales Tax Act were taken on the ground that the turnover in respect of gunny bags had escaped assessment. Fresh assessments were accordingly made for the assessment years mentioned above levying sales tax on the estimated turnover of gunny bags involved in the total quantity of sugar sold inside U.P. Similar assessments were made under Section 9(3) of the Central Sales Tax Act read with Section 21 of the U.P. Sales Tax Act, and Central sales tax at the rate of 7 per cent, was levied on the estimated turnover of the gunny bags involved in the sale of sugar outside Uttar Pradesh. Similar assessments have been made for the other assessment, years both under the U.P. and the Central Sales Tax Acts.

6. The petitioner has challenged these assessments by means of this and the connected writ petitions. Writ Petition No. 2834 of 1967 refers to the assessment year 1961-62 and is directed against the assessment under the U.P. Sales Tax Act and Writ Petition No. 2836 of 1967 is directed against the corresponding assessment for the same year under the Central Sales Tax Act. Similarly the remaining writ petitions relate to the remaining assessment years.

7. The main contention of the petitioner in all these writ petitions is that there has been no sale of gunny bags as such and the levy of tax on the estimated turnover of gunny bags is accordingly unauthorised and without jurisdiction.

8. Before we proceed to examine this contention on merits, it is necessary to dispose of a preliminary objection raised on behalf of the opposite parties. It is contended that an alternative remedy is provided both in the U.P. and the Central Sales Tax Acts against an erroneous order of assessment. The alternative remedy provided is threefold. First, there is an appeal provided, then a revision and finally there is a reference to the High Coxirt on questions of law. It is alleged that the petitioner has already availed of the alternative remedy and as such he is not entitled to invoke the writ jurisdiction of this Court under Article 226 of the Constitution.

9. It is now well settled that the existence of an alternative remedy is not an absolute bar even though the same has to be taken into consideration by the courts while granting reliefs under Article 226 of the Constitution. In fact the Supreme Court in Calcutta Discount Co. Ltd. v. Income-tax Officer, Calcutta, and Anr. [1961] 41 I.T.R. 191 at p. 208, ruled :

When the Constitution confers on the High Courts the power to give relief, it becomes the duty of the courts to give such relief in fit cases and the courts would be failing to perform their duty if relief is refused without adequate reasons.

10. We have, therefore, to see whether the instant is a fit case for the exercise of jurisdiction under Article 226 of the Constitution, the existence of an alternative remedy notwithstanding.

11. In the instant case, the quantum of tax is not in dispute. The grievance of the petitioner is that there has been no sale of gunny bags as can attract the provisions of either the U.P. or the Central Sales Tax Act. A contention like this, if true, goes to the root of the matter and affects the jurisdiction of the Sales Tax Authorities. The petitioner has averred that appeals were filed before the Assistant Commissioner (Judicial) on the ground that there being no sale, the levy of sales tax on the estimated turnover of gunny bags was unauthorised. The Assistant Commissioner (Judicial) rejected the appeals. Thereafter the petitioner filed revision petitions under Section 10 of the U.P. Salts Tax Act which are still pending before the Judge (Revisions) Sales Tax. The petitioner made a request to the Judge (Revisions) to stay the recovery of the tax during the pendency of the revision petition, but this request of the petitioner was virtually turned down inasmuch as the Judge (Revisions) imposed a condition which was much too onerous. The condition imposed by the Judge (Revisions) was that the petitioner was to pay 75 per cent, of the tax for all the years in question and to furnish security for the balance of 25 per cent. According to the averments contained in the writ petition, the petitioner-company had suffered a huge loss of about 10 lacs in recent years and it, therefore, could not comply with the condition imposed by the Judge (Revisions). In these circumstances the petitioner made a request to the Judge (Revisions) for the expeditious hearing of the revision petitions, but that request was also rejected. The petitioner has further stated that in the normal course the revision petitions are not likely to be heard before the year j970. The question involved is a recurring one and as such further assessments are likely to be made against the petitioner for the subsequent years until the matter is finally decided by the Judge (Revisions) or eventually by this Court on a reference under section II. The petitioner is also likely to be subjected to coercive process for the recovery of the tax. The petitioner, therefore, submits that this Court should grant the necessary relief under Article 226 of the Constitution as the statutory remedy provided in the Act is in the circumstances too onerous and not at all speedy.

12. We are impressed by the submission. If the contention of the petitioner is correct, then the levy of tax would clearly be without jurisdiction. It would therefore be just and proper to examine the petitioner's contention on merits rather than to leave him to puruse the alternative remedy, which, in the peculiar circumstances of the case, has proved to be inefficacious.

13. The short question that falls for consideration, therefore, is as to whether there was any* sale of gunny bags. It is now well settled that there should be an agreement between the parties for the purpose of transferring title to goods, that it must be supported by money consideration, and that as a result of the transaction property must actually pass in the goods. Unless all the elements are present there can be no sale: see State Of Madras v. Gannon Dunkerley & Co., (Madras) Ltd. [1958] 9 S.T.C. 353 at p. 365.

14. Now, a contract of sale may not necessarily be express. It may also be implied. In Government of Andhra Pradesh v. Guntur Tobaccos Ltd. [1965] 16 S.T.C. 240, a somewhat similar question arose before the Supreme Court. After reiterating the ingredients of a sale, as mentioned above, it was held that in business transactions the contracts are frequently not recorded in writing setting out all the covenants and conditions thereof, and the terms and incidents of the contracts have to be gathered from the evidence and attendant circumstances. The question in each case would be about the true agreement between the parties and the terms of the agreement would have to be deduced from a review of all the attendant circumstances. It was further held that from the mere passing of title to goods either as integral part of or independent of goods it cannot be inferred that the goods were agreed to be sold, and the price was liable to sales tax.

15. In the instant case it is not disputed that there was no express contract of sale of the gunny bags between the petitioner-company and its customers. There could, of course, be an implied contract. But the existence of an implied contract of this nature had to be inferred from the relevant circumstances and the material on the record as observed by the Supreme Court in Hyderabad Deccan Cigarette Factory v. State of Andhra Pradesh [1966] 17 S.T.C. 624 at p. 628 :

The authority concerned should ask and answer the question whether the parties in the instant case, having regard to the circumstances of the case, intended to sell or buy the packing materials or whether the subject-matter of the contracts of sale was only the cigarettes and that the packing materials did not form part of the bargain at all, but were used by the seller as a convenient and cheap vehicle of transport.

16. In Commissioner of Taxes, Assam v. Prabhat Marketing Co. Ltd. [1967] 19 S.T.C. 84, the Supreme Court had once again to consider a question similar to the one involved in the present case. That was a case of sale of hydrogenated oil which was exempt from sales tax. The question was as to whether the value of the containers in which hydrogenated oil was sold could be assessed to sales tax. There also it was held by the Supreme Court that the value of the containers would be assessable to sales tax if there was an express or implied agreement for the sale of such containers and the mere fact that the price of the containers was not separately fixed made no difference. It was further held that the question as to whether there was an agreement to sell packing material was a pure question of fact depending upon the circumstances found in each case.

17. In the instant case there being no express contract of sale of gunny bags, the only question before the Sales Tax Authorities was as to whether there was an implied contract of sale. Now such a question could not be decided on fictions and surmises. The burden lay upon the Sales 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. To ascertain these facts, he could rely upon oral statements, accounts and other documents, personal inquiry and other relevant circumstances such as the nature and purpose of the packing materials used as also the cost of the packing materials-gunny bags in the instant case.

18. We have looked through the assessment orders to see if there is any material to support the inference that the gunny bags were transferred by the petitioner-company to its customers under an implied contract of sale. It appears that the Sales Tax Officer relied merely upon the judgment of the Additional Judge (Revisions), Varanasi Range, passed in the case of Kamla Pati Motilal Sugar Mills and based his decision on the following factors as contained in the aforesaid judgment;

(1) Gunny bags...items of commercial and marketable commodity. (2) They are included within the definition of 'goods' as defined in Section 2(d) of the U.P. Sales Tax Act. (3) There was transfer of property in such goods. (4) The price of gunny bags is deemed to be included in the ex-factory price as prescribed by the Government of India.

19. Obviously the Sales Tax Officer omitted to consider the crucial question as to whether the transfer of property in gunny bags was as a result of any contract of sale either express or implied. In the absence of a finding as to the existence of a contract of sale, there can be no sale in the eye of law. The Sales Tax Officer has placed no material on record pointing towards the existence of an implied contract of sale. The appellate order of the Judge (Appeals) discloses no better state of affairs. He has discussed some case law to show that there could be an implied contract of sale of container or of packing material even when no separate price might have been charged for them. Now that is a proposition which goes without saying; but the question remains as to what is the material upon which an implied contract of sale can be inferred. We are constrained to say that the order of the Judge (Appeals) also does not disclose any such material.

20. The case of Hyderabad Deccan Cigarette Factory [1966] 17 S.T.C. 624, a case strongly relied upon by the learned Standing Counsel appearing for the opposite parties, gives an indication as to the circumstances from which inference of an implied sale may be drawn. One of the circumstances indicated by their Lordships relates to the value of the container. If the container is costly as compared to the value of its contents, an inference of an implied sale of the container may be drawn.

21. The Sales Tax Authorities in the instant case, however, have indicated no such circumstance. It is a matter of common knowledge that in a bag full of sugar the cost of a gunny bag is insignificant as compared to the value of sugar contained therein. Even according to the counter-affidavit filed on behalf of the opposite parties, the value of a gunny bag works out to 1.55 per cent, of the value of a bag full of sugar. This proportion between the value of a gunny bag and a bag full of sugar, in our opinion, cannot be said to be so high as to lead to an inference of an implied sale of the gunny bag. Moreover, it is not the case of the department that the petitioner could employ any other packing material cheaper than a gunny bag.

22. The Sales Tax Officer as also the Judge (Appeals) appear to have presumed that the value of the gunny bags must have been included in the sale price of sugar. Admittedly the sugar was a controlled commodity at the material time and its price used to be fixed by the Government. There is no material whatsoever on the record to show that while fixing the sale price of sugar the Government took into consideration the value of gunny bags, nor indeed is there any indication as to the extent to which the sale price of the sugar was enhanced on that account. In the circumstances it cannot be said that the property in the gunny bags was passed by the petitioner-company to its customers for money consideration.

23. As a result of this discussion we find that two important ingredients of a sale as understood in law are missing. Neither any contract of sale has been established nor has it been proved that the property in gunny bags was transferred for money consideration. The finding, rather the assumption, of the Sales Tax Authorities that there was a sale of gunny bags cannot, in the circumstances of the case, be upheld.

24. The result is that the assessment order is without any material and it is well settled that an assessment order without any material can be juashed by a writ of certiorari.

25. It was next urged by the learned Standing Counsel that we should not interfere at this stage and should allow the revision pending before the Judge (Revisions) to be disposed of as the Judge (Revisions) has the power to make further enquiries. We cannot accede to this request. The question as to whether the Judge (Revisions) can make further enquiries so as to bring on record fresh material is of a hypothetical nature so far as the instant case is concerned. The learned Standing Counsel has not been able to point out to us as to what other enquiry the department has in view or what other material the departmental authorities wish to bring on record. We have already indicated above that in a case like this the onus lay upon the Sales Tax Officer to bring on record the material to establish the existence of an implied contract of sale. As it is, the Sales Tax Officer failed to bring any such material on the record in support of his finding that there existed an implied contract of sale of gunny bags, nor is there anything to show that the petitioner had failed to supply any relevant information required by the Sales Tax Officer entitling him to draw an adverse inference against the petitioner. Moreover, from the assessment order we find that his attention was drawn to the judgment of the Supreme Court in Hyderabad Deccan Cigarette Factory case, a summary whereof appears in 17 S.T.C. (short notes). We have already quoted a passage from that judgment which indicates very clearly what a sales tax authority has to do in a case like this. The omission of the-department to bring on record materials pointing towards the existence of an implied contract of sale of gunny bags either at. the assessment or at the appellate stage shows that the department had in its possession no such material.

26. In these circumstances we cannot but hold that the impugned assessment order is arbitrary and without any material. In State Of Kerala v. C. Velukutty. 60 I.T.R. 239, the assessment order under the Sales Tax Act was found to be arbitrary and without any material. The High Court of Kerala set aside the assessment order. The Supreme Court confirmed the order of the High Court and also refused the request of the State to remand the matter to the Tribunal for fresh disposal.

27. For all these reasons, we allow this writ petition with costs. A writ of certiorari shall issue quashing the assessment order dated 31st May, 1966, passed by the Sales Tax Officer II, Kanpur, and the order dated 21st March, 1967, passed by the Assistant Commissioner, (Judicial) Sales Tax, Kanpur.