TIRUMALA VENKATESWARA TIMBER ANDBAMBOO FIRM vs COMMERCIAL TAX OFFICER, RAJAHMUNDRY

The Supreme Court held that Explanation III to Section 2(1)(n) of the Andhra Pradesh General Sales Tax Act, 1957 does not enlarge the definition of 'sale' to include mere entrustment to an agent, thus it is not ultra vires. The Court clarified that the tax is imposed only when there is a transfer of title to goods, distinguishing between a contract of sale and a contract of agency. The Court ruled that the nature of the transactions must be determined based on the specific facts and materials presented, and not in a writ application under Article 226.