A transaction cannot be characterized as a sale unless there is a transfer of property in the goods supplied and consideration is paid for the same.

RAJAMANNAR, C.J.

These two second appeals arise out of a suit, O.S. No. 112 of 1947, on the file of the Court of the Subordinate Judge of Coimbatore, brought for the recovery of a sum of Rs. 2, 995-6-3 alleged to have been wrongfully collected as sales tax. The plaintiff is a registered partnership firm carrying on business as jewellers and merchants in gold and silver bullion and specie in Coimbatore. For the year 1944-45, the Deputy Commercial Tax Officer, Coimbatore, assessed the plaintiff firm to sales tax on a turnover of Rs. 51, 22, 169-12-3 in respect of the plaintiff's main shop and a turnover of Rs. 5, 27, 890-0-3 in respect of the plaintiff's branch shop dealing with sliver. There was an appeal by the plaintiff to the District Commercial Tax Officer and applications in revision to the Board of Revenue at Madras. There was a partial reduction in the assessable turnover. The plaintiff alleged that as per the final orders of the Board of Revenue a sum of Rs. 1, 34, 790-2-9 in the turnover of the branch shop and a sum of Rs. 1, 64, 749-2-0 in the turnover of the main shop, making a total of Rs. 2, 99, 539-4-9 had been wrongly assessed to a tax amounting to Rs. 2, 995-6-3. It is for the recovery of this amount of sales tax alleged to have been wrongfully collected that the suit was instituted. The total sum of Rs. 2, 99, 539-4-9 comprised three items in dispute :

1. Rs. 1, 13, 967-9-6 and Rs. 61, 837-12-0 being the value of silver bullion supplied from the branch shop and the main shop respectively to certain manufacturers of silverware and silver jewellary at Kumbakonam for being made into finished ware. The said supplies of silver were treated by the sales tax authorities as sales of bullion by the plaintiff firm to the Kumbakonam merchants. The plaintiff's contention was that the transactions were not sales at all within the meaning of the term "sale" in the General Sales Tax Act, but were only supplies of raw material for conversion into finished products for wages only.

2. A sum of Rs. 20, 823-9-3, alleged to have been wrongly included in the turnover of the branch shop.

3. A sum of Rs. 1, 02, 911-6-0 being the value of the stock on hand in the branch shop of the plaintiff firm on 31st July, 1944. On and from 1st August, 1944, one V. R. M. Ramalingam Chettiar was taken as an additional partner in respect of the branch business alone, in accordance with the terms of a deed of partnership executed on 2nd August, 1944. It was recited in this partnership deed that the balance of assets and liabilities, stocks, and the staff etc., according to the balance sheet account ending with 31st July, 1944, in the business conducted by he plaintiff firm were taken possession of by the new partnership, which included Ramalingam Chettiar and commenced to do business under the name and style of P. A. Raju Chettiar and Brothers, Silver Department, as and from 1st August, 1944. The sales tax authorities decided that the transaction amounted to a sale by the plaintiff firm, to the new partnership, and therefore included the said amount in the turnover of the plaintiff firm. The plaintiffs contend that this was wrong. The Government denied liability to refund any part of the amount claimed, and justified the decision of the sales tax authorities in respect of all the three items. The learned Subordinate Judge of Coimbatore who tried the suit found that the second item of Rs. 20, 822-9-3 was wrongly included in the turnover but negatived the plaintiff's claim in respect of the other two items. The suit was, therefore, decreed partly for a sum of Rs. 208, being the tax collected on the said sum of Rs. 20, 822-9-3. Otherwise the suit was dismissed. The Government accepted the decision of the Subordinate Judge, but the plaintiff filed an appeal in respect of the two items disallowed. The learned District Judge agreed with the Subordinate Judge as regards the first item, namely, the supply of silver to the Kumbakonam merchants but diff