JUDGMENT

SHAH, J.-The Sales Tax Tribunal, Bombay, referred under section of the C. P. and Berar Sales Tax Act, 1947, the following question to the High Court of Judicature at Bombay :

"Whether the transactions in dispute amounted to sales in view of agreements produced by the applicants at pages 195 to 205 of the Assistant Commissioner s record ?"

Following an earlier judgment in Civil Miscellaneous Case No. 305 of 1954-Abdul Rashid Hafiz Din Mohammad v. The State of Bombay- the High Court answered the question in the affirmative. Messrs Haft Din Mohammad Haji Abdulla-who are hereinafter referred to as the assessees-have appealed to this Court with certificate of fitness.

The assessees are bidis merchants at Kamptee, District Nagpur in the former State of Madhya Pradesh. They held at the material time a licence issued by the Government of the Central Provinces for the manufacture and sale of bidis in and outside the State of Madhya Pradesh. Between November 13, 1947, and November 1, 1948, the assessees despatched bidis to merchants at diverse places in India, each merchant executing an agreement in the form of a letter addressed to the assessees, a sample form whereof is set out here below :-

"(1) You will have to meet my demand of bidis in my area.

(2) You will have to give delivery of bidis at Manmad station.

(3) I will sell your bidis at the rate fixed by you adding to it the expenses incurred.

(4) Money towards goods will be remitted to you as sales are effected or sometimes remittance will be made in advance.

(5) After the goods are delivered, I shall be responsible for the damages 6r risk at my place or in transit.

(6) I shall take from you, in lieu of my labour, Rs. 3-3-0 as commission per pitara.

(7) You will have the right to increase or reduce the rate of bidis.

(8) On the goods remaining in stock when the rate is increased or decreased necessary adjustment of accounts will be made.

(9) If I were to be acting in contravention of these conditions, you will have the right to cancel my agency. You will have right to make arrangements for the sale of your bidis as you think best."

Whether this agreement creates a relation of principals and agent or vendors and purchaser between the assessees and the merchant to whom bidis were despatched is the sole question which falls to be determined in this appeal. The relation between the parties has manifestly to be ascertained in the light of the terms incorporated in the letter and the attendant circumstances. The designation which a party chooses to give to the relation, especially in case of liability to pay tax, is of little consequence. The Court has in each case, having regard to the terms and the attendant circumstances, to ascertain the true relation between the parties without giving undue importance to the special expressions used by them. It is true that in commercial usage, especially in modern contracts; the expression "agents" or "agency" has acquired an extended meaning : often the so-called agent is merely a buyer who has been given favourable terms in a particular area to sell the manufacturer s or supplier s goods. The use of the expression "agency" in clause (9) has therefore no special importance.

A sale is transfer of property for a price. That is the true concept of "sale" under the Sale of Goods Act and also under the C.P. and Berar Sales Tax Act. Again, liability to pay sales tax arises under the C.P. and Berar Sales Tax Act if there be a sale of goods liable to tax, and not otherwise. Let us see whether the covenants in the agreement contemplate the transfer of property in the bidis despatched by the assessees to the merchants to whom they are despatched. By clause (3) of the agreement, the merchant receiving the bidis has agreed to sell them at the rates fixed by the assessees : he is only entitled to add to the rate fixed by the assessees the expenses incurred. By clause (6) the merchant is entitled to Rs. 3-3-0 as commission per box. That remuneration is expressly st