Barin Ghosh and C.M.Prasad JJ.

1. Heard learned Counsel for the parties. If there is a contract for sale, three elements are essential, namely, parties, property and price. The purchaser must agree to purchase from the seller and, at the same time, the seller must agree to sell to the purchaser. The property agreed to be sold should be ascertained by both the seller and the purchaser. The price to be paid and received should also be ascertained and agreed by the both. In the absence of any of these elements, the contract for sale will fail.

2. Essential Commodities Act is not a deterrent for production or manufacture of essential commodities. The same however, is a deterrent in the matter of choosing the buyer of essential commodities. Producers or manufacturers of essential commodities have no market. They are bound to sell essential commodities to the buyer to be nominated by the Central Government. Inasmuch as, producers or manufacturers of essential commodities have no market, there is no known method of fixing the price of essential commodities. The Act, therefore, requires the Central Government to determine the price of essential commodities. The legislature while making the Act has laid down the principles upon which price of essential commodities is required to be fixed.

3. The question is whether sale of essential commodities to a buyer to be chosen by the Central Government and at a price to be determined by the Central Government is or is not sale. A Constitution Bench of the Hon ble Supreme Court comprising seven Hon ble Judges in the case of Vishnu Agencies (Pvt.) Ltd. V/s. Commercial Tax Officer and Ors. reported in, has held that even a statutory sale may have some modicum of consensuality so as to remain a sale in the eye of law and consequently would be leviable to sale tax. Therefore, sale of essential commodities is selling of such commodities within the meaning of the provisions of law dealing with sale of goods would be the logical conclusion. A Full Bench of this Court in the case of Vishnu Sugar Mills Ltd. V/s. The Food Corporation of India and Anr. reported in 1986 P.L.J.R. 1045, has held so.

4. In the instant case, the appellant is a manufacturer of sugar, an essential commodity. A part of the sugar manufactured by the appellant can be sold by the appellant in the open market and accordingly, in relation to that part of sugar manufactured by it, the appellant can choose its buyer and can fix the price of sugar to be sold to such chosen buyer, which price is normally fixed on the basis of the price prevalent in the market depending upon supply and demand. The remaining part of sugar manufactured by the appellant cannot be sold by the appellant to any one, except to the nominee of the Central Government and at a price to be determined by the Central Government. Such sugar is known as levy sugar.

5. As the appellant is obliged to sell levy sugar to the nominee of the Central Government at the price fixed by the Central Government, the other sugar mills manufacturing sugar in this country have similar obligation in relation to that part of sugar manufactured by them, which is levy sugar. The condition prevalent in the country for manufacture of sugar varies from place to place. In order to fix price of levy sugar, in the background of such variable conditions, the Central Government fixes price of levy sugar on zone wise basis. Such fixation is, however, notified by one composite Notification. The Central Government is required to fix the price of levy sugar once in a sugar year, normally starting from the month of July and stretching up to the month of August of the next year. However, there is no hard and fast rule that the Central Government can only once fix the price of levy sugar for a particular sugar year.

6. As has been admitted before us and as it appears from the judgment of the Hon ble Supreme Court rendered in the case of Shri Malaprabha Cooperative Sugar Factory Ltd. V/s. Union of In