Judgment

T. L. VENKATARAMA AIYAR J. : This appeal arises out of proceedings for assessment of sales tax payable by the respondents for the year 1949-1950, and it raises a question of considerable importance on the construction of Entry 48 in List II, Sch. VII to the Government of India Act, 1935, "Taxes on the sale of goods."

2. The respondents are a private limited Company registered under the provisions of the Indian Companies Act, doing business in the construction of buildings, roads and other works and in the sale of sanitary wares and other sundry goods. Before the sales tax authorities, the disputes ranged over a number of items, but we are concerned of this appeal with only two of them. One is with reference to a sum of Rs. 29,51,528-7-4 representing the value of the materials used by the respondents in the execution of their works contracts, calculated in accordance works the statutory provisions applicable thereto, and the other relates to a sum of Rs. 1,98,929-0-3 being the price of foodgrains supplied by the respondents to their workmen.

3. It will be convenient at this stage to refer to the provisions of the Madras General Sales Tax Act, (Mad. IX of 1939), in so far as th