Thadani, C.J:— We have before us a reference made by the learned Commissioner of Taxes, Assam, under Section 32 of the Assam Sales Tax Act of 1947 (Act XVII [17] of 1947), in the matter of assessment of sales-tax in respect of what have been regarded as sales having been made in Assam by Messrs Ramniwas Satyanarayan, Lalchand Todi, Tolaram Surujmal, Rajendra Limited, Nowrangrai-Kissendayal, Meghraj Mansuk, and Chockchand Ballabox, for the period ending 31-3-1948.
2. The assessees were taxed by the Superintendent of Taxes, Shillong, under S. 17(4) of the Act on 21-3-1949, on the failure of the assessees to submit a return of their turnovers for the period ending 31-3-1948. The Superintendent of Taxes was, therefore, obliged to assess them on such information as he was able to gather. Against the assessment made by the Superintendent of Taxes, the seven assessees appealed to the Assistant Commissioner of Taxes, Assam, under S. 30 of the Act challenging the assessments made by the Superintendent of Taxes, Shillong. The learned Assistant Commissioner dismissed the seven appeals on 25-1-50. Against the decision of the appellate Assistant Commissioner, the assessees appealed to the Commissioner of Taxes, Assam, on 19-3-50 under R. 27, Assam Sales Tax Rules. Just as the appellate Assistant Commissioner had disposed of the appeals of the seven assessees before him by one order, the learned Commissioner of Taxes, Assam, did likewise by his order dated 31-8-50. The seven assessees then filed seven petitions on 24-11-50 under sub-s. (2) of Section 32 of the Assam Sales Tax Act of 1947 requiring the Commissioner to refer certain questions of law arising out of his order, dated 31-8-50, to this Court. The questions referred to us by the learned Commissioner of Taxes, Assam, are these:
“(1) Whether the despatches of 41 consignments of jute by the petitioners to their respective buyers as consignees and against contracts entered into prior to the despatches constitute a “sale” for purposes of Assam Sales Tax Act 1947 (Assam Act XVII [17] of 1947) and for that matter the turnover therefrom taxable?
(2) Whether the despatches of five consignments to the commission agent by two of the petitioners constitute a “sale” in terms of the Act and for that matter the turnover therefrom taxable?
(3) Whether the Assam Sale Tax Act 1947 (Assam Act XVII [17] of 1947) is ultra vires of Section 297 of the Government of India Act 1935 because of the imposition of a tax thereunder on the turnover from the above consignments? and
(4) Whether, in view of the facts and circumstances of the case, the assessments under sub-s. (4) of S. 17 were illegal?”
3. In order to appreciate the significance of the questions referred to us, it is necessary to set out certain facts. The petitioner Ramniwas Satyanarayan despatched 2 consignments of jute from Assam one on 14th and the other on 15-3-1948 — to consignees other than himself and against contracts of sale made in Calcutta on 11-12-47 and 10-2-48. The assessee Lalchand Todi despatched 8 consignments between 7-2-48 and 29-3-48. Two of them were consigned to the commission agent called Harikishan Das Bhairudan, and the rest to consignees other than himself, against prior contracts of sale made in Calcutta. Assessee Tolaram Surujmal despatched seven consignments between 3-2-48 and 26-3-48,—four of which were made against contracts of sale made in Calcutta between 1-9-1947 and 13-2-1948, in the names of the buyers; the remaining three were consigned to the commission agent Harikishandas Bhairudan.
4. Assessee Rajendra Limited sent 18 consignments between 5th February and 29-3-1948 against prior contracts of sale made in Calcutta between 11-12-1947 and 10-2-194S, to consignees other than themselves or their agents. Assessee Nowrangrai Kishandayal despatched 4 consignments between 4th February and 10-3-1948 against prior contracts of sale made in Calcutta on 5-12-1947. Assessee Meghraj Mansuk despatched 4 consignments between 7th February and 14-3-1948 against prior contracts of sale made in Calcutta between 12th and 18-12-1947, to different consignees. Assessee Page: 180Chockchand Ballabox despatched 3 consignments between 16th February and 10-3-1948 against prior contract of sale made in Calcutta. In other words, out of a total of 46 consignments, 41 were consigned by the assessees to their buyers as consignees, against contracts of sale made in Calcutta prior to the dates of despath. The remaining five consignments, three of which belonged to Tolaram Surujmal and two to Lalchand Todi, were despatched to the commission agents as consignees, but were not made against any contracts of sale.
5. Two specimen bought and sold notes communicated by the broker to the buyers and sellers respectively appear, one at page 100 of the printed book in Reference No. 1 of 1951 and the other at page 8 of the printed book in Reference No. 3 of 1951. It is unnecessary to reproduce the two specimen forms in their entirety. It is sufficient to set out certain terms and conditions material to the purposes of our decision.
6. The terms and conditions as to delivery were that the jute contracted for was to be delivered free at the buyers' mill or godowns at Calcutta, where it was to be weighed. But before the goods were delivered at the buyers' mill or godown, the buyers were required to pay 90% of the price of the goods against delivery of documents, namely, the steamer or railway receipts; the remaining 10% was to be paid after inspection, weighment and delivery at the buyers' mill or godown in Calcutta; if the sellers failed to deliver the Railway or Steamer Receipt to the buyer in Calcutta, the buyer had the option to cancel the contract; in some contracts it is provided that if the buyer failed to accept the Railway or Steamer Receipt, the seller had the right to cancel the contract. It is not disputed that 19 consignments, out of 41, made by the assessees, are covered by 9 contracts which can be traced; the contracts appertaining to the remaining consignments are not available. Of the 9 contracts which are available, 5 are in the form of the specimen contract at page 8 of the printed book in Reference No. 3 of 1951; the remaining 4 contracts are in the form of the specimen contract at page 100 of the printed book in Reference No. 1 of 1951.
7. On the questions referred to us by the learned Commissioner of Taxes, Assam, his opinion was as follows:
“Question No. 1.—Under Sub-s. (12) of S. 2 of the Act “sale” means “any transfer of property in goods for cash or deferred payment or other valuable consideration and includes a transfer of property in goods involved in the execution of a contract.” From the facts cited elsewhere, it will appear that the consignments were despatched against prior contracts and the consignor and the consignee in respect of each despatch were also different. The consignees again were the buyers of the goods. It is, therefore, clear that there was a transfer of property in goods from the consignor to the consignee and in execution of a contract. This transfer was complete at the time the goods were placed aboard the steamer or railway and consigned to another party. The decision in Sadasook Kothari v. Chaitram Rambilash, No. 12 of 1924-29 Cal. W.N 808 does not apply inasmuch as it was the result of the construction of a particular contract before the Court and did not lay down any general proposition.
The place where and person by whom the contract was entered into are immaterial in view of the provisions in the Explanation to S. 2(12) and so long as the goods are in Assam at a particular point of time. The despatches, in this case, were against prior contracts and, as such, the goods were actually in Assam when the contracts were entered into in Calcutta. Neither the contracts nor the supplies were in respect of “unascertained goods” as alleged. Jute was the goods contracted for and supplied and, as such, not “unascertained goods”. It will thus be seen that the despatches constituted a “sale” as defined in sub-s. (12) of S. 2 of the Act, and the turnover therefrom was taxable in the hands of the particular dealer under the Act.
Question No. 2: — The functions of the commission agent are described in para. 5 of Annexure A of the petition for reference. It will appear that the function ascribed to him cannot be discharged by him in the absence of a transfer, to him, of property in goods despatched to him. This transfer is in the nature of ope for “deferred payment” and takes place at the time the goods are placed aboard a steamer or rail and consigned to him. It will thus appear that the despatch of the 5 consignments by two of the petitioners involved a transfer by them of property in goods for deferred payment and constituted a “sale” taxable under the Act.
Question No. 3: — This point has been adequately dealt with in the orders of the appellate authorities and I agree with their conclusion. Section 297(1)(a) of the Government of India Act, 1935, has, as was pointed out in Bhola Prasad v. Emperor, A.I.R 1942 F.C 17, no application to any legislation other than with respect to entry 27 and entry 29 in the Provincial Legislative List and the Act challenged is with respect to entry 48 of the List. Clause (b) of sub-s. (1) of Section 297 of the Government of India Act, 1935, has also no application to the case under consideration inasmuch as the tax does not discriminate between jute produced in Assam and outside it and in favour of the former. If, as a remote result, it does at all discriminate, such discrimination is certainly not in favour of jute produced in Assam.
Question No. 4:— The petitioners might have been under the bona fide impression that no tax would be levied on sales of jute, and might not have, on that account, submitted returns. But then there was no excuse for them not to do so after service of the notices under Ss. 16(2) and 17(4). Whatever may have been their accounting year, they were bound to submit the return of their turnover at least in respect of that portion of the accounting year corresponding to the two months of the return period ending 31-3-1948. It will thus appear that because of this default, the Superintendent of Taxes was fully justified in proceeding to assess and to complete the assessments under sub-s. (4) of S. 17.
In view of the facts and circumstances of the case and the reasons stated above, it is respectfully submitted that the answers to Questions 1 and 2 should be in the affirmative and those to questions 3 and 4 should be in the negative.”
8. The first two questions manifestly overlap one another. The point involved in the two questions is—whether the 46 consignments sent from Assam against prior contracts of sale made in Calcutta are subject to a sales tax as being sales made in Assam—sales in which property in the goods had passed to the buyers in Assam.
9. “Sale” is defined in sub-s. (12) of Section 2 of the Assam Sales Tax Act, 1947, in these terms:
“‘Sale’ with all its grammatical variations and cognate expressions means any transfer of property in goods by any person for cash or deferred payment or other valuable consideration, and includes a transfer of property Page: 181in goods involved in the execution of a contract, that does not include a mortgage, hypothecation, charge or pledge. It also includes a transfer of goods on the hire purchase or other instalment system of payment, notwithstanding the fact that the vendor may retain the title in the goods as a security for payment of the price;
Explanation.— Notwithstanding anything to the contrary in the Indian Sale of Goods Act, 1930, the sale of any goods which are actually in Province at the time when the contract of sale (as defined in that Act) in respect thereof is made, shall, irrespective of the place where the said contract is made, be deemed for the purposes of this Act, to have taken place in the Province.”
10. From the reference made by the Commissioner, it is not clear to us whether the learned Commissioner was of the view that the contracts of sale made in Calcutta on behalf of the assessees were sales within the meaning of sub-s. (12) of S. 2 or whether they were sales within the meaning of the Explanation thereto, or under both. Dr. Gupta who appeared for the State of Assam was conscious of this difficulty, for he was conscious of the fact that prima facie the sales in question cannot be brought within the Explanation to sub-s. (12) of S. 2 of the Act in view of the fact that there is not an iota of evidence to show that when the contracts of sale were made in Calcutta, the goods contracted for were actually in the State of Assam. He was, therefore, content to rely upon the definition of ‘sale’ in sub-s. (12) of S. 2, adding that if we did not agree with his contention that property in the goods had passed to the buyers when the goods were made over to the Steamer Company in Assam for transmission to the buyers, the question whether the contracts of sale would be covered by the Explanation to sub-s. (12) of S. 2, should be left over for further consideration by the taxing authorities.
11. We think this is a fair proposal. The learned Commissioner seems to think that so long as the goods at the time of appropriation were in Assam, the date and the place where the contract of sale was made, are immaterial. This view is clearly erroneous. The goods must be actually in Assam at the date of the contract of sale and not at the date of the appropriation of the goods to the contract. The reasoning of the learned Commissioner, namely, “the despatches in this case were against prior contracts and, as such, the goods were actually in Assam when the contracts were entered into in Calcutta,” is manifestly erroneous. It does not follow that when the consignments were despatched from Assam against prior contracts of sale made in Calcutta, the consignments were actually in Assam. It may well be that the goods appropriated to the contracts were not actually in Assam at the time when the contracts of sale were made in Calcutta, but came into being about the time of the appropriation.
12. Again, the learned Commissioner fell into a very serious error in thinking that the contracts in question were in respect of “ascertained goods”. Dr. Gupta has quite frankly stated that the contracts involved in this case were contracts ab initio for sale of ‘unascertained goods’, and not specified or ascertained goods. In answering this reference, we are proceeding on the basis that the contracts of sale in dispute are not to be deemed to be sales within the purview of the Explanation to sub-s. (12) of S. 2 of the Act, without proof that the goods were actually in Assam at the date on which the contracts of sale were made in Calcutta.
13. The simple question then is—are the contracts of sale in dispute sales within the meaning of sub-s. (12) of S. 2 of the Act? The answer to this question depends upon the answer to another question, namely,—where did property in the goods pass to the buyers, a question which must be answered in conformity with the principles or rules contained in chap. Ill, Sale of Goods Act 1930. As we have said, Dr. Gupta did not dispute the fact that the contracts of sale in dispute were contracts for the sale of unascertained goods or future goods by description. There is no dispute as to the interpretation of Section 18 of the Sale of Goods Act. It is not disputed that when there is a contract of sale for unascertained goods and the goods are subsequently ascertained, the property in the goods does not necessarily pass when the goods are ascertained. Whether, upon the ascertainment of the goods, property in them is transferred to the buyer, is a question of fact which has still to be decided in accordance with the principle contained in Section 19(1) of the Sale of Goods Act, 1930, which says:
“Where there is a contract for the sale of specific or ascertained goads, the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.”
14. The language of S. 19(1) makes it quite clear that where the goods are subsequently ascertained—as in the present case,—the question as to whether property in the goods is transferred to the buyer, is a question which must be decided with reference to the intention of the parties.
15. Dr. Gupta quite frankly stated that he does not rely upon Sections 20, 21 and 22 of the Sale of the Goods Act, 1930, for, clearly these sections refer to sales ab initio of specific goods in a deliverable state, that he was content to rest his case on Sections 23 and 25 of the Sale of Goods Act, 1930. Sections 23 and 25 of the Sale of Goods Act are in these terms:
“23. (1) Where there is a contract for the sale of unascertained or future goods by description and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be express or implied, and may be given either before or after the appropriation is made.
(2) Where, in pursuance of the contract, the seller delivers the goods to the buyer or to a carrier or other bailee (whether named by the buyer or not) for the purpose of transmission to the buyer, and does not reserve the right of disposal, he is deemed to have unconditionally appropriated the goods to the contract.”
“25. (1) Where there is a contract for the sale of specific goods or where goods are subsequently appropriated to the contract, the seller may, by the terms of the contract or appropriation, reserve the right of disposal of the goods until certain conditions are fulfilled. In such case, notwithstanding the delivery of the goods to a buyer, or to a carrier for other bailee for the purpose of transmission to the buyer, the property in the goods does dot pass to the buyer until the conditions imposed by the seller are fulfilled.
(2) Where goods are shipped and by the bill of lading the goods are deliverable to the order of the seller or his agent, the seller is prima facie deemed to reserve the right of disposal.
(3) Where the seller of goods draws on the buyer for the price and transmits the bill of exchange and bill of lading to the buyer together, to secure acceptance or payment of the bill of exchange, the buyer is bound to return the bill of lading if has does not honour the bill of exchange and if he wrongfully retains the bill of lading the property in the goods does not pass to him.”
16. According to Dr. Gupta, there was unconditional appropriation of the goods to the contracts by the sellers with the implied assent of the buyers. When it was pointed out to Dr. Gupta that it was not reasonable to make use of any implied assent of the buyers within the meaning of S. 23(1) in view of the fact that at no stage did the buyers and the sellers come into personal or vicarious contact, the contracts having been made through the agency of a broker, he contended that by reason of the fact that the buyers had agreed to the term that the goods were to be made over by the sellers to a carrier, they gave an implied assent to the unconditional appropriation the moment the sellers made over the goods to a carrier in Assam, thereby transferring property in the goods to the buyers. In other words, Dr. Gupta's contention was that where a seller makes over the goods to a carrier in terms of the contract as to carriage as distinct from delivery not only will the act be deemed to be an unconditional appropriation within the meaning of sub-s. (2) of Section 23 of the but the Act would also amount to an unconditional appropriation within the meaning of sub-s. (i) of Section 23 of the Sale of Goods Act.
17. We are unable to accept this contention, for, if what is deemed to be unconditional appropriation within the meaning of sub-s. (2) of S. 23 is also without more an unconditional appropriation within the meaning of sub-s. (1) of Section 23, sub-Section (1) of Section 23 of the Sale of Goods Act, would be clearly redundant. In the construction of statutes, there is always a presumption against redundancy. We think sub-s. (1) of S. 23 is wholly independent of sub-s. (2) of S. 23. It is to be observed that sub-s. (1) of S. 23 does not contemplate unconditional appropriation in pursuance of a contract; it refers to unconditional appropriation with the assent of the parties, whereas in sub-s. (2) of S. 23 it is the delivery to a carrier in pursuance of a contract which operates as an unconditional appropriation, and is, therefore, deemed to be unconditional appropriation. If this distinction between the two sub-sections is borne in mind, it seems to us that it is reasonable to say that where a party relies upon what must be deemed to be an unconditional appropriation within the meaning of sub-s. (2) of S. 23, he cannot be allowed to say that it was also without more an unconditional appropriation within the meaning of sub-s. (1) of S. 23.
18. The question then for our consideration is — whether the sellers in this case delivered the goods to a carrier in pursuance of the contract. We have referred to the terms of the contract as to delivery, and they clearly contemplate delivery to the buyers in Calcutta, at their jute mills or go downs. It follows then that in making over the goods to a carrier in Assam, the sellers were merely acting in execution of the contract which provided that the goods were to be carried either by the steamer companies' boats or by a railway. The act of the sellers, therefore, in making over the goods to a carrier, was merely an act done in pursuance of a contract as to the carriage of the goods, and not as to their delivery. The act of the sellers, therefore, in the circumstances of this case, cannot be deemed to be unconditional appropriation within the meaning of sub-s. (2) of Section 23 of the Sale of Goods Act.
19. The term as to delivery in the contract, namely, that the goods were to be delivered at the buyers' mill or their go downs, was still a live condition as to delivery to be fulfilled in Calcutta when the goods were made over by the sellers to a carrier in Assam. The reservation of the liability of the sellers to give delivery of the goods at the buyers' mill or godown in Calcutta in pursuance of the contract, is, in our opinion, fatal to the contention of the State of Assam that property in the goods had passed to the buyers in Assam, and that the sellers had parted with the right of disposal of the goods when they made over the goods to a carrier in Assam for transmission to the buyers.
20. So far as sub-s. (1) of S. 25 of the Act is concerned, we think it assists the assessees, for, when the goods were appropriated to the contract by the sellers making them over to a carrier in Assam for transmission to the buyers, the concurrent conditions as to delivery and payment of the price as provided for in the contracts, were live conditions, and until those conditions were fulfilled in Calcutta, the sellers must be deemed to have reserved the right of disposal, notwithstanding the fact that the goods were made over to a carrier in Assam for the purpose of transmission to the buyers. If the right of disposal was reserved, as, in our opinion, it was, it follows that property in the goods did not pass to the buyers in Assam notwithstanding the fact that the goods were made over to a carrier in Assam for the purpose of transmission to the buyer.
21. Dr. Gupta also relied upon sub-s. (2) of Section 25 of the Sale of Goods Act. His contention was that a steamer-receipt stands on the same footing as a Page: 183bill of lading and that conversely, as in this case the steamer-receipt was deliverable to the buyers or to their agents, the sellers must be deemed prima facie to have parted with their right of disposal. The short answer to this contention is that sub-s. (2) applies only to a ship's bill of lading, and not to a steamer-receipt or a railway receipt. A steamer or railway receipt may be a document of title, but sub-s. (2) of S. 25 does not contemplate all documents of title, but only one kind, namely a bill of lading. Unlike a bill of lading, which does not require to be endorsed before delivery can be taken, a railway or steamer receipt has to be endorsed by the carrier or his agents or servants before delivery can be taken. It is, therefore, not correct to say that if a railway or steamer receipt is made out in the name of a buyer, property in the goods passes to the buyer.
22. Dr. Gupta has relied upon a case reported in Deo Raj v. Munshi Ram, 48 ALL. 622. But it is clear from a perusal of the report that the learned Judges came to the conclusion that the goods in that case were unconditionally appropriated in accordance with Section 88 of the Contract Act. Section 83 of the Contract Act, corresponds to sub-s. (1) of Section 23 of the Sale of Goods Act, 1930. When the case reported in 48 ALL. 622, was decided, the Indian Sale of Goods Act was not in force. As we have said in the earlier part of our judgment, Dr. Gupta relied upon sub-s. (1) of Section 23 of the Sale of Goods Act, 1930, not independently, but in conjunction with sub-s. (2) of S. 24 of the said Act. We have already indicated that, on the facts of this case, neither Section 23(1) nor Section 23(2) of the Sale of Goods Act applies.
23. The case reported in 48 ALL. 622, therefore, has no application to the facts before us. For the same reasons, we think the case reported in Clive Jute Mills Co. v. Ebrahim Arab, 24 Cal. 177, has no application, the decision being based upon unconditional appropriation in accordance with Section 83 of the Contract Act. In Juggernath v. E.A Smith, 33 Cal. 547, the term as to delivery in the contract was that the goods were to be placed free alongside S.S Uganda in the river Hoogly. In pursuance of this contract, the goods were placed alongside S.S Uganda in the river Hoogly and they were subsequently taken on board the vessel. The plaintiffs (sellers) had obtained mate's receipt for the consignment, which they presented, together with their bill for Rs. 46,000, the price of the goods, to the defendants (buyers).
24. The buyers kept the bill and mate's receipt for examination, and afterwards, without paying for the goods, obtained from Messrs Mackinnon, Mackenzie & Co., the agents of the steamer Uganda, the bills of lading for the goods, and lodged them with the defendant Bank, who gave them advances on the goods. The plaintiffs claimed the goods as their property. The suit was not defended by the buyers, but by the Bank, which contended that the plaintiffs (sellers) were not the owners of the goods, and that property in the goods had passed to the buyers.
25. Here again the decision was based upon the finding as a fact that there was unconditional appropriation with the assent of the buyer in accordance with Section 83 of the Contract Act. Moreover in the case before us the term as to delivery was that the goods were to be delivered at the buyers' jute mills or godowns. In 33 Cal. 547, the term as to delivery was that the sellers were required to place the goods alongside S.S Uganda for the purpose of shipment abroad, which they did; nothing more was required to be done by the sellers. In this aspect namely in the matter of delivery, the Calcutta case is clearly distinguishable from the case before us.
26. Dr. Paul for the assessees, the sellers, has rightly contended that assuming, without conceding, that there was unconditional appropriation within the meaning of sub-s. (1) of Section 23 of the Sale of Goods Act, 1930, or sub-S. (2) of S. 23, the question, namely, did the sellers notwithstanding the unconditional appropriation, intend to transfer property in the goods still persists, and that in ascertaining the intention of the sellers in this behalf, regard must he had to the terms of the contract, the conduct of the parties, and the circumstances of the case, as laid down in sub-s. (2) of Section 19 of the Sale of Goods Act, 1930.
27. Dr. Paul points out that in the absence of an agreement to the contrary, delivery and payment of the price are concurrent conditions, as laid down in Section 32 of the Sale of Goods Act, 1930, in the case before us, the payment of 90% of the value of the goods was stipulated to be a concurrent condition with the delivery of documents for the purpose of enabling the buyers to obtain delivery from the steamer company; these concurrent conditions were to be fulfilled in Calcutta; the failure to fulfil these conditions in Calcutta would have given rise to a right to the parties to cancel the contract, having regard to Section 51 of the Contract Act, and Section 12 of the Sale of Goods Act, 1930; this reservation of the right to cancel the contract or the exercise of option as it is described in the contracts, negatives the contention of the State of Assam that the sellers transferred property in the goods in Assam to the buyers when the goods were put on board the river steamer in Assam.
28. We think Dr. Paul's contention is well founded. In the case before us, as the concurrent conditions, namely, the payment of 90% of the value of the goods against delivery of documents, were to be fulfilled simultaneously at Calcutta, it is futile to contend that the sellers had transferred property in the goods to the buyers in Assam, when they made over the goods to a carrier in Assam, for the sellers did not deliver the goods to the carrier in pursuance of the contract as to delivery, namely, delivery of the goods to the buyers at the buyers' mills or godowns in Calcutta. We think, in a given contract, there cannot Page: 184be two distinct, deliveries. Delivery in pursuance of the contract as to delivery may be made in different stages, but it is nevertheless one delivery made in different stages in pursuance of the contract as to delivery. The mere making over of the goods to a carrier in Assam for transmission to the buyer in pursuance of the contract as to carriage of the goods, as distinct from delivery, cannot be regarded as delivery in pursuance of the contract.
29. Dr. Paul, has invited our attention to a passage in Benjamin on Sale at page 336, bearing on the subject of appropriation by delivery analogous to the subject treated in sub-s. (2) of Section 23 of the Sale of Goods Act, 1930. It is stated:
“The rule, however, applies only where the carrier is, as he generally is, the buyer's agent to take delivery. If the facts show, as, for example, where the seller reserves a right of disposal, or where he agrees to deliver the goods at their destination, that the carrier is the seller's agent, delivery is not a final appropriation. In such cases, under the Act a different intention appears.”
30. In the case before us, the sellers agreed to deliver the goods at their destination namely, Calcutta, at the buyers' jute mills or godown. This is a complete answer to Dr. Gupta's contention.
31. The learned Commissioner of Taxes, Assam, dismissed the case reported in Sadasook Kothari v. Chaitram Rambilash, 29 Cal. W.N 808, by saying
“that it does not apply inasmuch as it was the result of the construction of a particular contract before the Court and did not lay down any general proposition.”
32. It seems to us that the learned Commissioner did not take the trouble of reading the case with the care which it deserved. The material fact in that case is identical with the material fact before us. In 29 Cal. W.N 808, the term as to delivery was that the goods were to be delivered at the buyer's mill-ghat or press-house by Rail or Steamer as in this case. It was held that property in the goods did not pass until they had reached their destination.
33. Dr. Paul also relied upon a case reported in Commr. of Income Tax, Madras v. Mysore Chromite Ltd., 1951-20 I.T.R 546 (Mad.). The decision in that case is instructive for, in deciding the question as to where the income had accrued, it was accepted by both the parties that the income accrued at the place where the sale took place. It was, therefore, necessary for the learned Judges of the Madras High Court to decide where the sale took place. The learned Judges held:
“that the property in the goods did not pass at any place in British India but passed only in London where the bills of exchange were accepted and the delivery of the bills of lading was obtained from the E.B Ltd., London. Therefore, the profits from sales arose outside British India in London.”
34. This decision manifestly turns upon the consequences of the performance of the two main conditions to involved in a contract of sale, namely, delivery and payment of price.
35. In Hakim Seing v. Maung Ba Chit, 62 Ind. App. 242 (P.C) the facts were these: There were contracts for the purchase of a specific quantity of paddy stored in godowns made by bought and sold notes in which the sale-price was entered. The intention of the parties as to the time when the property was to pass was not expressed in the contracts. Earnest money was paid and part-payments of the price were made and, when the balance of the purchase price was paid, an entry of its receipt was made in the sold notes. On these facts, it was held that, in the circumstances of the case, the property was intended to pass on the payment of the balance. Their Lordships of the Privy Council observed:
“The rules embodied in Sections 20 to 24 of the Sale of Goods Act are rules for ascertaining the prima facie intention of the parties and must yeild to any contrary intention which may be gathered from the circumstances of the case. The question of the intention of the parties must, in the absence of an express term in the contract depend upon the peculiar features of each transaction.”
36. In our view, these observations of their Lordships of the Privy Council strongly support the view that where the terms of a contract relating to delivery and price are to be performed at a particular place, property in the goods does not pass until the goods reach that place, and the conditions of the contract are performed.
37. In Louis Dreyfus & Co. Ltd. v. South Arcot Groundnut Market Committee, A.I.R 1945 Mad. 383, the seller was required to send the goods to the purchaser's godown at C, where the purchaser was given power to inspect and reject, and pay the balance of price, it was held that the sale took place at C. The case reported in Louis Dreyfus & Co. v. Province of Madras, 1952-3 S.T.C 19 (Mad.) is also of considerable assistance to the assessees.
38. We have, therefore, come to the conclusion that having regard to the terms of the contract, the conduct of the parties and the circumstances of the case, property in the 46 consignments did not pass to the buyers when the consignments were put on board the river steamer in Assam, that the property in the goods passed to the buyers in Calcutta when the terms of the contract as to delivery and payment of price were fulfilled. We accordingly answer the questions referred to us in these terms:
(1) That the despatches of 41 consignments of jute by the petitioners to their respective buyers as consignees and against contracts entered into prior to the despatches, did not constitute a “sale” for the purposes of the Assam Sales Tax Act, 1947, and were, therefore, not liable to be taxed.
(2) That the despatches of five consignments to the commission agents by two of the petitioners did not constitute a “sale” in terms of the Assam Sales Tax Act of 1947, and were, therefore, not taxable.
(3) Question No. 3 was not pressed by the assessees. We answer the third question in these terms: The Assam Sales Tax Act of 1947 (Act XVII [17] of 1947) is intra vires Section 297 of the Government of India Act, 1935.
(4) Question No. 4 was also not pressed before us. Our answer, therefore, is, that the assessments made under sub-s. (4) of Section 17 of the Asssam Sales Tax Act of 1947, were legal, but as the contracts of sale relating to the consignments did not constitute “sales” for the purposes of the Assam Sales Tax Act of 1917, the assessees were not liable to be assessed.
39. Dr. Gupta for the State of Assam urged that we should make it clear by our order that the question, whether the contracts of sale covered by the despatches constitute sales within the meaning of the Explanation to Sub-s. (12) of S. 2 of the Act, is left undetermined by our answer to the questions referred to us, and that it is open to the State Government hereafter to assess the assessees on such contracts as can properly come within the purview of the Explanation to sub-s. (12) of S. 2 of the Act.
40. We have already stated in the earlier part of our judgment that we have not before us material upon which we can come to the conclusion that the contracts of sale involved in this reference can be deemed to be sales within the meaning of the Explanation to sub-s. (12) of S. 2 of the Act. Whether if and when the authorities have material before them upon which they can bring the contacts of sale involved in this reference within the purview of the Explanation to sub-s. (12) of S. 2 of the Act, they will be entitled to tax the assessees,—is a question for the authorities concerned to decide. We express no opinion at this stage. The reference is disposed of by the answers which we have given above.
Deka, J.:— I agree.
B/V.R.B
41. Reference answered.