Lord Macmillan:-

The Crown is here the appellant in a claim to recover from the respondents, the Dominion Engineering Company Limited (hereinafter called "the Dominion Company") the sum of $10,844.46 as sales tax, together with penalties, under S. 86, Special War Revenue Act, Chap. 179 of the Revised Statutes of Canada, 1927, as amended by subsequent enactments. The claim of the Crown has been rejected by the Exchequer Court of Canada (Angers J.) and by a unanimous judgment of the Supreme Court. The terms of S. 86 (1), Special War Revenue Act, under which the Crown seeks to impose liability on the Dominion Company are as follows:-

"86 (1) There shall be imposed, levied and collected a consumption or sales tax of 8 per cent. on the sale price of all goods-

(a) produced or manufactured in Canada, payable by the producer or manufacturer at the time of the delivery of such goods to the purchaser thereof.

Provided that in the case of any contract for the sale of goods wherein it is provided that the sale price shall be paid to the manufacturer or producer by instalments as the work progresses, or under any form of conditional sales, agreement, contract of hire-purchase or any form of contra