T.L. Venkatarama Aiyyar JUDGMENT
T.L. Venkatarama Aiyyar, J.
1. This is an appeal by the Sales Tax Officer, Pilibhit, against the judgment of the High Court of Allahabad granting firstly, a writ of certiorari quashing certain assessment orders made against the respondent, and secondly, a writ of prohibition in respect of certain other proceedings for assessment of tax under the provisions of the Uttar Pradesh Sales Tax Act (Act XV of 1948). The respondent is a firm doing business in forward contracts, and was assessed in respect of such contracts to a tax of Rs. 1,082-8-0 for the year 1948-1949 by an order dated 24th February, 1950, Exhibit A, and to a tax of Rs. 7,369 for the year 1949-1950 by an order dated 23rd May, 1950, Exhibit B. For the period, 1st April, 1950, to 31st January, 1951, the respondent paid a sum of Rs. 845-4-0 as tax. Assessment proceedings were also started by the appellant in respect of certain forward contracts relating to gur and peas. The respondent challenged the legality of these proceedings and of the assessment orders on the ground that the Act in so far as it imposed a tax on forward contracts was ultra vires the powers of the Provincial Legislature. The learned Judges agreed with this contention, and issued a writ of certiorari quashing the orders of assessment, Exhibits A and B, and a writ of prohibition in respect of proceedings for assessment of tax on forward contracts in gur and peas. The matter now comes before us in appeal under a certificate of the High Court under article 133(1) of the Constitution.
2. Under the Government of India Act, 1935, the Provincial Legislature derived its power to impose a tax on the sale of goods under entry 48 in List II of the Seventh Schedule, and the Uttar Pradesh Sales Tax Act XV of 1948, was enacted in exercise of this power. Section 2(h) of the Act defines "sale" as follows :
"Sale" means within its grammatical variations and cognate expression, any transfer of property in goods for cash or deferred payment or other valuable consideration and includes forward contracts but does not include a mortgage, hypothecation, charge or pledge."
3. It is the extended definition of sale as including forward contracts in this section that is relied on as conferring authority on the appellant to make the orders in Exhibits A and B. The point for decision in this appeal is whether the power to impose a tax on the sale of goods under entry 48 includes a power to impose a tax on forward contracts.
4. Under the statute law of India which is based on English law on the subject, a sale of goods and an agreement for the sale of goods are treat........