THE SALES TAX OFFICER, PILIBHIT vs MESSRS. BUDH PRAKASH JAI PRAKASH.

The Supreme Court held that the distinction between a sale and an agreement to sell is well-defined, emphasizing that the phrase 'Taxes on the sale of goods' in entry No. 48, List II, Schedule VII of the Government of India Act, 1935, allows the Provincial Legislature to impose tax only on completed sales. Consequently, Section 2(b) of the Uttar Pradesh Sales Tax Act, 1948, which includes forward contracts in the definition of 'sale', is ultra vires. The Court also declared Explanation III to Section 2(h) and Section 3B of the Act as ultra vires, affirming the High Court's decision to quash the assessment orders against the respondent firm engaged in forward contracts.