Judgment

SHAH, J. : This is an appeal against the judgment of the Madhya Pradesh High Court dismissing a petition filed by the Bhopal Sugar Industries Ltd.. hereinafter called the Company for a writ under Art. 226 of the Constitution quashing the order of the Sales Tax Officer, dated May 1, 1960 which imposed liability upon the Company for payment of sales tax under the Madhya Bharat Sales of Motor Spirit Taxation Act, 20 of 1953 in respect of motor spirit and lubricants used for own vehicles.

2. The Company carries on the business of manufacturing sugar, and maintains for the propose of that business a fleet of motor trucks and other motor vehicles. The Company is also registered under the Act as a retail dealer of motor spirit and lubricants. During the period April 1, l957 and March 31, 1958 the Company consumed a part of its stock-in trade of motor spirits and lubricants for its own vehicles. The Sales Tax Officer, Bhopal Region, by order dated May 1, 1960 assessed the Company to pay tax in respect of motor spirits and lubricants consumed for its vehicles. The Company then filed a petition in the High Court of Madhya Pradesh at Jabalpur under Art. 226 of the Constitution for a writ in the nature of certiorari squashing the order dated May 1, 1960 passed by the Sales Tax Officer and the notice of demand issued in pursuance thereof, and for a writ of prohibition or mandamus restraining the Sales Tax Officer from recovering any tax in pursuance of the order.

3. The Company set up two grounds in support of its petition:

(1) That the Sales Tax Officer had power to levy tax on sale only i. e. on transfer of property for a price, and as there was no sale of motor oil and lubricants consumed by the Company for its own vehicles there being no transfer of property to any one, and no price being paid or promised, consumption of the articles was not taxable. That it was submitted is manifest from the charging Section 3 read with the definition under S. 2 (k) of the Act of retail sale which does not include consumption by a retail dealer of his own goods.

(2) That power of the State to levy tax on the sale or purchase of goods (other than newspapers) could be exercised only under Entry .54 of List II of Sch. 7 to the Constitution. Therefore the attempted levy of tax was illegal and without authority of law, and infringed the Company s fundamental right to carry on business and to hold and acquire property as guaranteed by Art. 19 (1) (f) and (g) of the Constitution.

4. At the hearing of the petition the High Court did not consider the grounds set up in support of the petition, but called upon the Company to produce a copy of its agreement with Caltex (India) Ltd. under which the supply of motor-spirits and lubricants was obtained by the Company, and proceeded to adjudicate the claim for relief in the light of the covenants of the agreement. The High Court dismissed the petition holding that the assumption made in the petition that the Company was the owner of the motor spirits and lubricants obtained from Caltex (India) Ltd. was not warranted. It was observed :

"These clauses and other clauses relating to the responsibility for loss, safeguard against contamination of petrol, sale by the dealer of the products of Caltex (India) Limited only, settlement of accounts - all point to the fact that the petitioner (the Company) was not constituted a full and absolute owner of the petrol supplied by Caltex (India) Limited at the petrol pump maintained by the petitioner at Sehore. The petrol remained the property of Caltex (India) Limited. and the petitioner sold it as an agent of the supplying Company. When, therefore, the petitioner obtained petrol for itself at the pump and used it in its own vehicles, there was a sale of the petrol by the petitioner as an agent of Caltex (India) Limited to the petitioner-company as a consumer. It was nothing but a purchase by the agent of property belonging to the principal. That being so, there was retail s