K. L. JOHAR AND COMPANY vs DEPUTY COMMERCIAL TAX OFFICER

The Supreme Court held that hire-purchase transactions are validly included in the term 'sale' under Explanation 1 to Section 2(h) of the Madras General Sales Tax Act, 1939. The Court established that there are two sales: one from the motor dealer to the appellant and another from the appellant to the intending purchaser, affirming the State's right to impose sales tax on both transactions. The Court rejected the appellant's contention that it was merely a financing agent and upheld the validity of the sales tax assessment.