M/S NEW INDIA SUGAR MILLS LTD. vs COMMISSIONER OF SALES TAX, BIHAR

The Supreme Court held that the transactions of sugar despatched by the assesses to the State of Madras under the directions of the Sugar Controller did not constitute sales under the Bihar Sales Tax Act, 1947. The Court emphasized that for a transaction to qualify as a sale, there must be a transfer of property under a contract of sale, which was absent in this case as the assesses were compelled to comply with the Controller's directions. Consequently, the levy of sales tax was deemed invalid as the Provincial Legislature lacked the authority to tax non-sale transactions under Entry 48, List II of the Government of India Act, 1935.