A sale under the compulsion of a statute is still a sale.

PATHAK, J. :- The assessee deals in foodgrains and oil-seeds at Maudaha in the district of Hamirpur. He supplied food-grains to the Regional Food Controller under the U. P. Wheat Procurement (Levy) Order, 1959. The turnover of food-grains so supplied was assessed to sales tax under the U. P. Sales Tax Act. On appeal by the assessee, the Assistant Commissioner (Judicial) Sales Tax, excluded that turnover from assessment. The Additional Judge (Revisions) Sales Tax upheld the exclusion, holding that the supplies effected by the assessee to the Regional Food Controller did not amount to a sale for the purpose of Section 2(h) of the U. P. Sales Tax Act. At the instance of the Commissioner of Sales Tax, the Additional Judge (Revisions) has referred the following questions:-

(1) Whether the sales made to the Regional Food Controller under the U. P. Procurement (Levy) Order, 1959, are sales within the meaning of "Sales" under Section 2(h) of the U. P. Sales Tax Act?

(2) Whether in the circumstances of the case the assessees are liable to pay sales tax on the sales made to the Regional Food Controller under the provisions of the U. P. Wheat Procurement (Levy) Order, 1959?"

The case came on for hearing before a Division Bench, which because of the importance of the questions raised, referred the case to a larger Bench. The case has now been laid before us.

2. To appreciate the controversy embodied in the questions referred, it is necessary to examine the U. P. Wheat Procurement (Levy) Order, 1959. The "Levy Order", as I shall describe it, was made in exercise of the powers conferred by Section 3 (2) of the Essential Commodities Act, 1955. It recites its purpose as the maintenance of supplies of wheat and the securing of its equitable distribution and availability at fair prices. Clause 3 of the Levy Order provides:-

"3. Levy on wheat procured or in stock:

(1) Every licensed dealer shall sell to the State Government at the controlled prices

(a) Fifty (50%) per cent of wheat held in stock by him at the commencement of this order: and

(b) Fifty (50%) per cent of wheat procured or purchased by him every, day beginning with the date of commencement of this order and until such time as the State Government otherwise directs.

(2) The wheat required to be sold to the State Government under sub-cl. (1) shall be delivered by the licensed dealer to the Controller or to such other person as may be authorised by the Controller to take delivery on bis behalf,"

Clause 4 confers the power of entry, search and seizure on enforcement officers with a view to securing compliance with the Levy Order.

3. The essential question before us is whether when a licensed dealer supplies wheat to the State Government pursuant to CL 3 of the Levy order he has effected a sale as defined under Section 2(h) of the U. P. Sales Tax Act and is liable to sales tax under that Act.

4. The contention of the Assessee is that the supplies made by it are not under any contract of sale between it and the State Government but wholly because of the compulsion imposed on it by Cl. 3 of the Levy Order, and therefore, there is no sale and consequently no liability to Sales Tax. The Commissioner urges that the supplies effected under the Levy Order, must be considered as made pursuant to an agreement between the assessee and the State Government and the provisions of Cl. 3 of the Levy order do not wholly exclude such agreement. Learned counsel for the parties have sought to support their submissions on the basis of some recent Supreme Court decisions, each party contending that what has been said there supports him. Before anything, therefore, it is appropriate that I refer to those decisions.

5. The first case is New India Sugar Mills v. Commissioner of Sales Tax Bihar, AIR 1963 SC 1207. The Assessee there owned a factory in Bihar and in compliance with directions issued by the Controller under the Sugar and Sugar Products Control Order, 1946 despatched sugar to the agents of the Stat