UNION TERRITORY OF CHANDIGARH versus M/S. AMRIT ROLLER FLOUR MILLS

Citation: [1985] SUPP. 2 S.C.R. 14 · Decided: 08-07-1985 · Supreme Court of India · Bench: R.S. PATHAK · Disposal: Appeal(s) allowed

Judgment (excerpt)

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UNION TERRITORY OF CHANDIGARH 
v. 
M/S. AMR.IT ROLLER FLOUR MILLS 
JULY 8, 1985 
(R.S. PATHAK & E.S. VENKATARAMIAH, JJ.j 
Punjab General Sales Tax Act 1948, Section 2(h) 
Roller Flour Mi1ls -
Licence holder under Wheat Roller 
Flour Mills (Licensing and Control) Order 1957 - Sale of maida, 
Suji and rawa to permit holders - Transactions whether constitute 
sale - Whether liable to be. taxed. 
The respondent-Firm was a Roller Flour Mills and held a 
licence under the Wheat Roller Flour Mills (Licensing and 
Control) Order, 1957. Clause 3 of the said Order provides that ao 
owner or person in charge of a roller Mill shall manufacture or 
cause to be manufactured any wheat product eY.cept under and in 
accordance with the terms and conditions of a licence issued 
under the Order. The licence was an annual licence renewable from 
year to year and liable to suspension or cancellation in the 
event of contravention of the Control Order or any of the condi-
tions of the licence. The licensee was required to abide by any 
directions issued by the licensing authority in regard to 
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purchase of wheat, the extraction of maida, suji and rawa and 
also in regard to the distribution or disposal of the wheat pro-
ducts. 
Wheat is supplied to the respondent under the orders of the 
Government of India. The respondent grinds the wheat and supplies 
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maida and suji emerging from that process to the holders of 
permits issued by the District Food and Supplies Officer. 
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The respondent was assessed for the years 1964-65 to 
1967-68 to sales tax under the Punjab General Sales Tax Act, 1948 
on the turnover of the supplies. effected by it. During the 
assessment proceedings it was contended that the transactions en-
tered into by it did not constitute "sales" within the meaning of 
the Act and as such sales tax should not be levied. The assessing 
authority relying on the decision in the Ezciee and Taxation 
Officer (Assessing Authority) Hissar and Another v. Jaswant Siugb 
(1971] 27 s.r.c. 582 rejected the pntention and assessed the 
firm. The assessment orders were maintained in appeal and in 
second appeal also. 
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U.T. CHANDIGARH v. AMRIT ROLLER FLOUR MILLS [PATHAK, J] 
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At the instance of the assessee, the High Court called for 
a reference and held that as the respondent was obliged to follow 
the instructions of the concerned authority in regard to the pur-
chase of wheat, or the extraction of maids, suji and raws as well 
as in regard to the distribution and disposal of such products, 
it followed the decision in Food Corporation of India & Another 
v. State of Punjab & Others [1971] 27 s.T.c. 582 and took the 
view that there was no •sale • • 
In the appeal to this Court on the question whether the 
transaction afffected by the respondent fall within the definiti-
on of "sale" under Clause (h) of Sec. 2 of the Punjab General 
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Sales Tax Act, 1948. 
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Allowing the appeals 
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In VishW Agencies (Pvt.) Ltd. etc. v. CoHercial 
Tax Officer & Others etc. [1978] 2 s.c.R; 433, this Court held 
that notwithstanding the conditions imposed by the statutory 
framework of the Control Order within which the dealer operated 
the transaction effected by him must clearly be regardi.d as 
sales. The instant case is covered by that decision. The trans-
actions effected by the respondent are 'sales' ·liable to tax. 
The Judgment of the High Court is set aside. The question ref err-
ed to the High Court is answered in the affirmative in favour of 
the appellant and against the respondent. [19 D-F] 
CIVIL APPELLATE JURISDICTION 
of 1978. 
Civil Appeal Nos. 404-407 
From the Judgment and Order dated 13.10.1976 of the Punjab 
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and llaryana High Court in General Sales Tax Reference No. 15,17, 
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18 and 19 of 1974. 
P.A. Francis, S ,p. Nayar and Miss A. Subhashini for .the 
Appellant 
S.T. Desai and R.S. Sodhi for the Respondent. 
The Judgment of the Court was delivered by 
PATHAK, J, 
These appeals by special leave are directed 
against the judgment of the High Court of Punjab and Haryana 
disposing of four references under the Punjab General Sales Tax 
Act, 1948. 
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SUPREME COURT REPORTS 
[1985] SUPP. 2 s.c.R. 
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The respondent firm, Messrs. Amrit Roller Flour Mills, 
carries on business at Chandigarh. 
It is registered as a dealer 
under the Punjab General Sales Tax Act, 1948 (hereinafter called 
the "Act"). 
It holds a licence under the Wheat Roller Flour 
Mills (Licens

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