KRISHNA CHANDRA ACHARYA Vs. BOARD OF REVENUE ORISSA

JUDGEMENT

(1.) THIS a reference under section 24(3) of the Orissa Sales Tax Act (XIV of 1947), made by the Member, Board of Revenue, Orissa.

(2.) THE facts giving rise to this reference are that the petitioner K. C. Acharya, is a contractor executing contracts in the Puri and Kunti Sections of the Embankment Division. The work involved in the contract was to repair the embankment by putting new earth and turf, and he is paid by the Public Works Departments for the supply of labour engaged in executing to contract.

(3.) I confess my inability to follow the reasoning of the Sales Tax Authorities in holding that the contractor is a "dealer" or that he supplied goods, or that the use of tools and implements constitutes supply of goods. In order to determine the liability of the assessee to tax under the Orissa Sales Tax Act the Court has got to ascertain whether there has been a sale of goods in the first instance. The expression "sale of goods", as has been observed by Mukherjea, J., (as he then was) in Poppatlal Shah v. The State of Madras ([1953] 4 S.T.C. 188; (1953) S.C.J. 369), is a composite expression consisting of various ingredients or elements. These elements are : (1) a bargain or contract of sale; (2) payment or promise of payment of price; (3) delivery of goods; and (4) actual passing of title. Each one of these ingredients is essential to a transaction of sale, and the sale is not completed or concluded, unless the purchaser becomes the owner of the property. It is clear therefore that one of the essential requisites of a transaction of sale of goods is the passing of title from one party to the other for a price in money paid or promised. It is the duty of the taxing authorities to examine all the facts involved in a transaction and ascertain whether, as a fact, there has been a sale; whether the sale relates to "goods" as defined in the Act; and whether the party to the sale satisfies the definition of the word "dealer". Unless all these elements are satisfied it cannot be said that the liability to tax has been incurred.