M/S. OUCHTERLONEY VALLEY ESTATES LTD. vs STATE OF KERALA(With Connected Appeals)

The Supreme Court held that the sale of teas by auction at Fort Cochin was completed at the fall of the hammer, as per Section 64(2) of the Sale of Goods Act, and thus the title passed immediately to the buyer. The Court found that the initial auction was not an executory contract but a concluded sale of ascertained goods. Consequently, the imposition of sales tax by the State of Kerala was erroneous, reversing the Kerala High Court's decision which upheld the tax based on a prior ruling in A. V. Thomas & Co. Ltd.