Judgement

B.K. Mukherjea J.- This appeal, which has come before us on a certificate granted by the Madras High Court under Arts. 134 (1) (c) and 132(1) of the Constitution, is directed against an appellate judgment of a Division Bench of the High Court of Madras, passed in Criminal Appeal No. 129 of 1952, by which the learned Judges affirmed an order of the Seventh Presidency Magistrate, Madras, dated 25-2-1952, convicting the appellant of an offence punishable under S.15, Madras General Sales-tax Act, and sentencing him to pay a fine of Rs. 1,000; in default to suffer imprisonment for a period of 3 months.

2. The appellant is a partner of a firm of merchants called "Indo-Malayan Trading Company" which has its Head Office in the city of Madras and carries on the business of selling and purchasing groundnut oil, saga and kirana articles. For the period 1-4-1947 to 31-12-1947-the company was assessed to sale-tax under the Madras Act 9 of 1939 for an amount of Rs. 37,771 annas odd on a total turnover of Rs. 37,75,257 and for failure to pay the same, proceedings were instituted against him under the provision of S. 15 of the Act which resulted in his conviction as mentioned above. The course of business, which is usually followed by the company and which was actually followed during the period for which assessment is made, is as follows. The company receives orders in the Madras office from Calcutta merchants for supply of certain articles. These articles are purchased in the local markets and they are dispatched to Calcutta by rail or steamer. The railway receipts and bills of lading are taken in the name of the vendor company and so also are the insurance policies, and they are sent to the company s bankers in Calcutta who deliver the same to the consignees on payment of prices and other charges. The sole point that requires consideration is whether in these circumstances the sale transactions were liable to be taxed under the General Sales-lax Act of Madras.

3. Before the High Court both the parties seem to have accepted the position that if on the facts stated above, which were not disputed by either side, the sales could be held to have taken place within the province of Madras, the tax could legitimately be levied on them but not otherwise. The parties differed, however, as regards the test to be applied, in determining whether the sales did take place within the province of Madras or not. On behalf of the appellant the contention raised was that the place of sale in regard to all the transactions was Calcutta, as the property in the goods sold, admittedly passed to the purchasers, in that city. The contention of the respondent State on the other hand was that the true test for determining the locality of the sale was not where the property in the goods sold passed, but where the actual transaction was put through. As the company had its Head Office in the city of Madras, its accounts were maintained there and the goods were delivered to the common carrier in that city, the sale, according to the respondent, must be deemed to have taken place in Madras even though the property in the goods sold passed outside the province.

4. The High Court accepted this contention of the respondent State. In the opinion of the learned Judges, the word "sale" has both a legal and a popular meaning. In the legal sense, it imports passing of property in the goods and it is in this sense that the word is used in the Sale of Goods Act. In the popular sense, however, it signifies the transaction itself which results in the passing of property. As the object of the Legislature in the Sale-lax Act is to impose a tax on the occasion of the sale, it is immaterial that the sale has been completed outside the province. The place where the property passes is, it is said, a matter of no concern to the taxing authority and in such context the popular meaning of the word is more appropriate and should be adopted. The further contention raised on behalf of the