JUDGMENT

BEG, C.J.I. :—I am in general agreement with my learned brother Chandrachud who has discussed all the authorities so admirably and comprehensibely. I, however, would like to add a few observations stating the general conclusion, as I see it, emerging from an application on general principles and accumulation of case law on the subject of what may be called statutory or compulsory sales. Are they sales at all so as to be exigible to sales tax or purchase tax under the relevant statutory provisions?

2. The term sale is defined as follows in Benjamin on Sale (Eighth Edn.):

"To constitute a valid sale there must be a concurrence of the following elements, namely:

(1) parties competent to contract;

(2) mutual assent;

(3) a thing, the absolute or general property in which is transferred from the seller to the buyer; and

(4) a price in money paid or promised."

3. It is true that a considerable part of the field over which what are called sales take place under either regulatory orders or levy orders passed or directions given under statutory provisions is restricted and controlled by these orders and directions, If, what is called a sale is, in substance, mere obedience to a specific order, in which the so-called price is only a compensation for the compulsory passing of property in goods to which an order relates, 453 at an amount fixed by the authority making the order, the individual transaction may not be a sale although the compensation is determined on some generally fixed principle and called price. This was, for example, the position in New India Sugar Mills v. Commissioner of Sales Tax, Bihar, AIR 1963 SC 1207. That was a case of a delivery according to an order given by the Govt. which could amount to a compulsory levy by an executive order although there was no legislative levy order involved in that case. On the other hand, in Commissioner, Sales Tax, U. P. Ram Bilas Ram, Gopal (AIR 1970 All 518) the order under consideration was actually called a levy order, but the case was distinguishable from New India Sugar Mills v. Commissioner of Sales Tax, Bihar (supra) on facts. It was held in the case of Ram Bilas (supra) that the core of what is required for a sale was not destroyed by the so-called levy order which was legislative. It is true that passages from the judgment of Pathak, J., in the case of Ram Bilas Ram Gopal (supra) were cited and specifically disapproved by a Bench of this Court in Chittar Mal Narain v. Commissioner of Sales Tax, (1971) 1 SCR 671. But, perhaps the view of this Court in Chittar Mal Narian Das (supra) goes too far in this respect. It is not really the nomenclature of the order involved, but the substance of the transaction under consideration which matters in such cases.

4. In the first type of case mentioned above the substance of the concept of a sale, as found under our law, itself disappears because the transaction is nothing more than the execution of an order. Deprivation of property for a compensation, which may even be described as price, does not, amount to a sale when all that is done is to carry out an order so that the transaction is substantially a compulsory acquisition. On the other hand, a merely regulatory law, even if it circumscribes the area of free choice, does not take away the basic character or core of sale from the transaction. Such a law which governs a class, may oblige sellers to deal only with parties holding licences who may buy particular or allotted quantities of goods at specified prices, but an essential element of choice is still left to the parties between whom agreements take place. The agreement, despite considerable compulsive elements regulating or restricting the area of free choice, may still retain the basic character of a transaction of sale. This was the position in Indian Steel and Wire Products Ltd. v. State of Madras, (1968) 1 SCR 479, Andhra Sugar Ltd. v. State of Andhra Pradesh, (1968) 1 SCR 705 and Sate of Rajasthan v. Karam Chand Thapar (AIR 19