# • - BALABHAGAS HULASCHAND v. STATE OF ORISSA - **Citation:** [1976] 2 S.C.R. 939 - **Court:** Supreme Court of India - **Decided:** 1975-12-09 - **Case number:** CAs Nos. 449-454 of 1971 - **Bench:** K. K. Mathew, S. Murtaza. Fazal Ali - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/balabhagas-hulaschand-v-state-of-orissa-6586 - **Pages:** 16 ## Headnote 939 Central Sales Tax Act, 1956-Ss. 2(g), 3, 4(2) (a) (b )-"Sale"-Ambit of the definition "Sale". i Central Sales Tax Act, 1956-Section 3 (a) read with s. 4 of the Sale of Gdods Act, 19,30-Agreement to sell is an essential ingredient of sale.- Central Sales Tax Act, 1956, s. 3(a)-Scope of s. 3(a)-Occosions the "movemelll of goods from one State to another" -Whether the agreement of sale A B occasions movement-W/1etha agreeme11t to sell was a forward co11tract or a conC tract i11 respect of unascertainable or future goods does not make any differe11ce, for the purposes of application of s. 3 (c•) of the AC/. Interpretation of statutes-Whether s. 3(a) of the Central Sales Tax Act i~ redundant and wouid apply to contingencies which may 11ot happen at 'all. Central Sales Tax Act. 1956-Section 3(a) read with Art. 286(3) of ihe Constitution of l11dia-Sale "in the "ourse of interstate trade or comD mcrcc"-Conditions to' be satisfied before a sa!e can be said to take place in the course of interstate trade or con1merce. The appellant, a firm dealing in buying and selling jute with headquarters at Calcutta, used to purchase raw jute grown in Orissa and despatch them in bags from Cuttack and Dhanmandal Railway Station to the Railway Mills Siding StatiOJJ in Calcutta. The goods were booked in the name of the buyer "KB & Co" through its licenced broker "EU & HE Ltd." and on the arrival of the goods the buyer inspected the goods and if they were found in accordance with the specifications mentioned in the agreement of sale, accepted them and paid their price. On the basis of these concluded transactions of sale th'e respondent State, levied sales tax under s. 3 (a) of the Central Sales Tax Act on the basis tjiat the sales were interstate sales. Since the assessing authorities negatived the contention of the appellant that the sale was merely an internal sale which took place in the State of West Bengal and since the Tribunal refused to make a reference, the appellant moved the High Court under s. 24 ( 3.) or the Orissa Sales Tax Act to direct the Tribunal to make a statement of the case to the High Court. The Tribunal referred two points, viz., (il Did the title to the goods pass in Oxissa or in West Bengal and (ii) Even if the title in the goods passed in West Bengal, whether in the facts and circumstances of this case, the transaction constituted "s-ale in the course of inter-state trade" ? The High Court held that although the title in the goods passed in West Bengal and the sale took place there, since the sale occasioned the movement of goods from Orissa to West Bengal it was an inter-State sale, and, therefore, it was clearly governed by s. 3 (a) of the Central Sales Tax Act. Affirming the judgment of the High Court and dismissing the appeals by ' special leave, the Court, HELD: (1) The definition of "sale" in s. 2(g) of the Central Sales Tax Act postulates the following conditions. (i) There must be a transfer of property in goods by one person to another; (ii) The transfer must be for cash or for deferred payment or for any other valuable consideration; and (iii) That such a transfer include~ a transfer of goods on' the hire .purchase or oth6r sYstem of payment by instalment etc. The word "sale'' defined in cl. (g) of s. 2 and used in s. 3(a), 4(2) (a) and (b) is wide enough to include not onlv a concluded contract of sale but also a contract or agreement of sale provided the agreement of sale stipulates that there was a transfer or property or movement 5-277 SCI/76 E F G H 940 SUPREME COURT REPORTS [1976] 2 S.C.R. A of goods. An agneement to sell by which the property did not actually pass was also an element of sale. [944H, 945A, C, Gl Bengal Immunity Co. Ltd. v. The State of Bilwr and others, [1955] 2 SCR 603, relied on. Sales Tax Officer, Pilibhit v. Budh Prakash Jai Prakash, 5 S.T.C. 193, 196, followed. B (2) When the statute uses the words "sale or purchase of goods", it autoc D E F G H matically attracts the definition of " ## Text _Characters 0–39,897 of 46,299. This is a partial read: ask again with offset=39897 for what follows._ • - BALABHAGAS HULASCHAND v. STATE OF ORISSA December 9, 1975 (K. K. MATHEW AND S. MURTAZA. FAZAL ALI, JJ.J 939 Central Sales Tax Act, 1956-Ss. 2(g), 3, 4(2) (a) (b )-"Sale"-Ambit of the definition "Sale". i Central Sales Tax Act, 1956-Section 3 (a) read with s. 4 of the Sale of Gdods Act, 19,30-Agreement to sell is an essential ingredient of sale.- Central Sales Tax Act, 1956, s. 3(a)-Scope of s. 3(a)-Occosions the "movemelll of goods from one State to another" -Whether the agreement of sale A B occasions movement-W/1etha agreeme11t to sell was a forward co11tract or a conC tract i11 respect of unascertainable or future goods does not make any differe11ce, for the purposes of application of s. 3 (c•) of the AC/. Interpretation of statutes-Whether s. 3(a) of the Central Sales Tax Act i~ redundant and wouid apply to contingencies which may 11ot happen at 'all. Central Sales Tax Act. 1956-Section 3(a) read with Art. 286(3) of ihe Constitution of l11dia-Sale "in the "ourse of interstate trade or comD mcrcc"-Conditions to' be satisfied before a sa!e can be said to take place in the course of interstate trade or con1merce. The appellant, a firm dealing in buying and selling jute with headquarters at Calcutta, used to purchase raw jute grown in Orissa and despatch them in bags from Cuttack and Dhanmandal Railway Station to the Railway Mills Siding StatiOJJ in Calcutta. The goods were booked in the name of the buyer "KB & Co" through its licenced broker "EU & HE Ltd." and on the arrival of the goods the buyer inspected the goods and if they were found in accordance with the specifications mentioned in the agreement of sale, accepted them and paid their price. On the basis of these concluded transactions of sale th'e respondent State, levied sales tax under s. 3 (a) of the Central Sales Tax Act on the basis tjiat the sales were interstate sales. Since the assessing authorities negatived the contention of the appellant that the sale was merely an internal sale which took place in the State of West Bengal and since the Tribunal refused to make a reference, the appellant moved the High Court under s. 24 ( 3.) or the Orissa Sales Tax Act to direct the Tribunal to make a statement of the case to the High Court. The Tribunal referred two points, viz., (il Did the title to the goods pass in Oxissa or in West Bengal and (ii) Even if the title in the goods passed in West Bengal, whether in the facts and circumstances of this case, the transaction constituted "s-ale in the course of inter-state trade" ? The High Court held that although the title in the goods passed in West Bengal and the sale took place there, since the sale occasioned the movement of goods from Orissa to West Bengal it was an inter-State sale, and, therefore, it was clearly governed by s. 3 (a) of the Central Sales Tax Act. Affirming the judgment of the High Court and dismissing the appeals by ' special leave, the Court, HELD: (1) The definition of "sale" in s. 2(g) of the Central Sales Tax Act postulates the following conditions. (i) There must be a transfer of property in goods by one person to another; (ii) The transfer must be for cash or for deferred payment or for any other valuable consideration; and (iii) That such a transfer include~ a transfer of goods on' the hire .purchase or oth6r sYstem of payment by instalment etc. The word "sale'' defined in cl. (g) of s. 2 and used in s. 3(a), 4(2) (a) and (b) is wide enough to include not onlv a concluded contract of sale but also a contract or agreement of sale provided the agreement of sale stipulates that there was a transfer or property or movement 5-277 SCI/76 E F G H 940 SUPREME COURT REPORTS [1976] 2 S.C.R. A of goods. An agneement to sell by which the property did not actually pass was also an element of sale. [944H, 945A, C, Gl Bengal Immunity Co. Ltd. v. The State of Bilwr and others, [1955] 2 SCR 603, relied on. Sales Tax Officer, Pilibhit v. Budh Prakash Jai Prakash, 5 S.T.C. 193, 196, followed. B (2) When the statute uses the words "sale or purchase of goods", it autoc D E F G H matically attracts the definition of "sale of goods" as' given in s. 4 of the Sale of Goods Act, 1930, and is to some extent pari materia to s. 3 of the Central Sales Tax Act so far as the transactions of sale is concerned. 'The inevitable conclusion that fellows from the combined effect of the interpretation of s. 3 of the Central Sales Tax Act and s. 4 of the· Sale of Goods Act is that an agreement to sell is also an essential ingredient of sale provided it contains a stipulation of transfer of goods from the seller to the buyer. [946E-F, 947A] ( 3) Since the word "sale" appearing in s. 2 (g) as also in s. 3 (a) of the Act includes an agreement to sell provided the said agreement contains a stipulation regarding passing of the property, if there is a movement of goods from one State to another, not in pursuance of the sale itself, but in pursuance of an agreement to sell, which later merges into a sale, the movement of goods would be deemed to have been occasioned by the sale itself wherever it takes place. When the movement of goods start, they shed the character of either unascertained goods or future goods. For the purpose of application. of s. 3 (a) of the Central Sales Tax Act, the question. whether the contract is a forward contract or not makes no material difference. [947B, C-D, 948F] ( 4) A statutory provision cannot be interpreted in a way which1 defeats the very object of the Act. It is equally well settled that the Legislature does not waste words er introduce useless or redundant provisions. The· contention that s. 3 (a) of the Central Sales Tax Act was nedundant or would apply to contingencies which may not happen at all, is not correct. [948D] Indian Chamber of Commerce v. C.l.T., West Bengal II Calcutta, . SCR 830, applied. 1976(1) (5) The following conditions must be satisfied before a sale can be said to take !)lace in the course of interstate trade or commerce : (i) that there is an agreement to sell which contains a stipulation express or implied regarding the movement of the goods from one State to another. (ii) that in pursuance of the said contract the goods, infact, move from one State to another; and (iii) that ultimately a concluded sale takes place in the State where the goods are sent which must be different from the State from which the goods move, because the tax is on sale and not on an agreement to sell or a forward contract. If these conditions are satisfied then by virtue of s. 9 of the Central Sales Tax Act it is the State from which the goods move which! will be competent to levy the tax under the provisions of the central Sales Tax Act. The question whether the agreemen~ to sell is in respect of ascertained or unascertained goods, existing or future goods, make no difference whatsoever so far as the interpretation of s. 3(a) of the Central Sales Tax is concerned. [949A-C, El Cement Dz'stributors (P) Ltd. v. Deputy Commercial Tax Officer, Ldgudi and others, 23 S.T.C. 86, 94, distinguished. Lmsen and Toubro Ltd., Madras-2 & others. v. Joint Commercial Tax Offi· cer, 20 S.T.C. 150, 186 & 187; The State of Madras v. N. K. Nataraia Mudaliw [1%1] 1 SCR 379, 391; Tata Iron and Ster! Cd. Ltd. v. S. R. Sarkar and others (1961] 1 SCR 379, 391; State Tradin~ Carporation of Indio Ltd. v. State of Mysore, [1963] 3 SCR 792, 797-798; Tata Engineering & Locomotive Co. Ltd. ' ' - BALABHAGAS v. ORISSA (Fazal Ali, J.) 941. v. The Assi.stant Commissione1r of Commercial Taxes. & Anr., [1970] 3 SCR A 862, 866; M /s. Kelvinator of India Ltd. v. The State at Hr:ryr:na [1973] 3 SCC 561, 560; The State of Tamil Nadu v. The Cement Distr!butors (P) Ltd. a.nd others [1975] 4 SCC 30 anc\ Oil India Ltd. v. The Superintendent of Taxes and others, referred to. CIVIL APPELLATE JURISDICTION : CAs Nos. 449-454 of 1971 & ..'r 888-890 of 197 4. J Appeals by special leave from the judgment and order dated the 27-4-1970 and 11-4-1973 of the Orissa High Court at Cuttack in special jurisdiction Cases Nos. 74 to 77 of 1968 and 70-72 of 1971 respectively. Hardayal Hardy, and Sukumar Ghose, for the appellant in CAs 449-454 of 1971. Gobind Das, G. S. Chatterjee for the respondent. Sukumar Ghose, for the appellant in CAs 888-890 of 1974. M. C. Bhandare, B. Parthasarthi for the respondent in CAs .888 and 889 of 1974. Ex parte for respondent in appeal No. 890 of 1974. The Judgment of the Court was delivered by B c D FAZAL Au, J.-These are two groups of appeals-one consisting; of six appeals by the firm Balabhagas Hulaschand dealing in jute. Civil Appeal No. 449 /71 arises from the Judgment of the High Court in S.J.C. No. 41 of 1968 decreed on April 22, 1970 in respect of tl1e E assessment for the quarter ending June 1960. The oilier five appeals are by the same firm in respect of the sales tax levied by the State of Orissa for the quarters ending December, March 1960 and December 1960 to June 1961, decided by the judgment of the High Court in S.J.C. Nos. 73-77 of 1968 dated April 27, 1970. As all the appeals involve a common point they were consolidated and have been heard together. F Appeals Nos. 888-890/74 have been filed by the firm Mis Kaluram Ramkaran in respect of the assessment of tax made by the State of Orissa for the quarters ending September 30, 1961, June 30, 1962 and September 30, 1962. These appeals arise out of the judgment of the High Court given in S.J.C. Nos. 70-7211971 dated April 11, 1973. The High Court in these cases followed its previous judgment, which G is the subject-matter of the six appeals mentioned above, and held that the levy was valid. The points of law arising in these appeals also are identical to the points arising in the other six appeals referred to above, and in view of the common points of law involved in all these appeals we propose to dispose them of by one common judgment. The ap~llant Balabhagas Hulaschand is a firm dealing in buying H and selling jute and has its Head Office in Calcutta. The firm used to purchase raw jute grown in Orissa and send the same to its buyers in the State of West Bengal. The modus operandi was that after the A B c D E F G H 942 SUPREME COURT REPORTS [1976] 2 s.c.R. goods were received by the appellant firm they were despatched in bags from Cuttack and Dhanmandal railway stations to the Railway Mills Siding in Calcutta. The bags were booked in the name of the buyer mills through their broker. The goods on arrival in the Mills Railway siding at Calcutta were inspected by the buyer firm and if they were found to be in accordance with the specifications mentioned in the agreement of sale they were accepted. The appellants in appeals Nos. 888-890174 are a firm dealing in similar business with this difference that it has got its purchasing centre at Kendupatna in the District of Cuttack, and it was from Cuttack that the goods were despatched to the buyers in West Bengal. The transaction of sale was entered into through a licensed broker • "East India Jute and Hessian Exchange Ltd." and the buyers were the • Managing Agents of the firm Kettlewell-Bullen & Co., Ltd., Calcutta. 1 -. A letter has been produced by the parties which appears at p. 24 of the Paper Book which forms the contract or agreement of sale entered into between the parties in pursuance of which the goods were despatched to the buyer firm at Calcutta. Under the contract the responsibility in respect of the quality, moisture, shortage in weight and risk in transit lay on the seller. It is also not disputed that in all these appeals a concluded sale takes place when the goods despatched in the name of the Calcutta firm were ultimately accepted by the said firm and the price of the said goods was paid to the appellants. On the basis of these concluded transactions of sale the Government of Orissa levied sales tax under s. 3 (a) of the Central Sales Tax Act, 1956, on the basis that the sales were inter-State sales and, therefore, fell within the ambit of that section. The assessing authorities upto the stage of the Tribunal negatived the contention of the appellants that the sale was merely an internal sale which took place in the State of West Bengal and not an inter-State sale. Thereafter the appellants moved the Tribunal for making a reference to the High Court of Orissa but failed to persuade the Tribunal to make a reference. The appellants then moved the High Court of Orissa under s. 24(3) of the Orissa Sales Tax Act to direct the Tribunal to make a statement of the case to the High Court. Accordingly the Tribunal referred the following points for consideration : " ( 1) Did title to the goods pass in Orissa or in West Bengal? · (2) Even if title in the goods passed in West Bengal whether in the facts and circumstances of this case, the transaction constituted "sale in the course of interstate trade ?" After considering the entire evidence and the circumstances and the law on the subject the High Court by its judgment dated April 22, 1970 negatived the plea taken by the appellants and held that although the title in the goods passed in West Bengal and the sale took place there, since the sale occasioned the movement of the goods from Orissa to West Bengal it was an inter-State sale, and, therefore, it was clearly governed bys. 3(a) of the Central Sales Tax Act. Thereafter 1, BALABHAGAS v. ORISSA (Fazal Ali, J.) 943 the appellants moved the High Court, for granting leave to appeal to this Court, which having been rejected, the appellants filed an application to this Court for grant of special leave to appeal and the same having been granted, these appeals have been set down for hearing before us. Mr. Hardy learned counsel for the appellants in Appeals Nos. 449454/71 has submitted only one point for our consideration. He has contended that on the facts found it would appear that the movement of goods from Orissa to West Bengal took place in pursuance of an agreement of sale and not in pursuance of the sale itself which actually took place in West Bengal, and, therefore, the sale is not covered bys. 3(a) of the Central Sales Tax Act and the levy made by the State of Orissa was· illegal. Mr. Ghose who followed Mr. Hardy and was appearing in appeals Nos. 888-890174 further added that the agreements in the instant cases were merely forward contracts in respect of unascertained and future goods, and, therefore, fell beyond the ambit of the provisions of the Central Sales Tax Act. Mr. Gobind Das appearing for the State of Orissa repelled the contentions of the appellants and submitted that the · circumstances clearly point out to the conclusion that although the sale took place in West Bengal it undoubtedly occasioned the movement of goods from one State to another, namely, from Orissa to West Bengal, and, therefore, were clearly covered by s. 3(a) of the Central Sales Tax Act, and the High Court was right in rejecting the contention of the appellants. Learned counsel for both the parties have cited a number of authorities of this Court and other High Courts before us. But before going to the authorities we would like to deal with the scope and ambit of the Central Sales Tax Act and try to determine the incidents of a sale which would attract the provisions of s. 3(a) of the Central Sales Tax Act. Before, however, taking up this point it may be necessary ,.. to mention the admitted circumstances in the case on which both the parties are agreed. They are- (1) that there was an agreement or contract of sale between the appellant firms and the Calcutta firms by which the appellants agreed to sell raw jute of certain specifications of weight and qua/_ity to the Calcutta firms; (2) that at the time when the contract of sale was entered into, the raw jute was not in existence as it was being grown; (3) that after the goods were ready the same were booked in bags by the appellants not in their names but in the names of the buyer firms in Calcutta; ( 4) that the goods were booked from Cuttack and Dhanmandal railway -stations in Orissa to the Railway Sidings of the buyer Mills at Calcutta; and A B c D E F G H A 944 SUPREME COURT REPORTS [1976) 2 s.c.R. (5) that all the goods which are the subject-matter of the sales tax levy in all these appeals were ultimately accepted by the buyers at Calcutta and a concluded sale took place at Calcutta in West Bengal. In view of these admitted circumstances, we have to determine the legal position. To begin with it would appear that the Central Sales B Tax Act was passed in the year 1956 and before that there was some amount of controversy regarding the authority which was to levy tax in case of inter-State trade. In The Bengal Immunity Company Ltd. v. The State of Bihar and Others( 1), Venkatarama Ayyar, J., speaking for the Court quoted Rottschacfer on Ccrn:stitutional Law ( 1939 Edition) where sale in the course of inter-State commerce was defined thus : (p. 785) : c "The activities of buying and selling con~titute interState commerce if the contracts therefor contemplate or necessarily involve the movement of goods in inter-State commerce." - The learned Judge also observed in that case : D "A safe could be said to be in the course of inter-State trade only if two conditions concur : ( 1) A sale of goods, and (2) a transport of those goods from one State to another under the contract of sale. Unless both these conditions are satisfied, there can be no sale in the course of interstate trade.,, E This Court, therefore, accepted the ingredients of an inter-State sale. F G H It appears that soon after the decision in the Bengal Immunity Company Ltd's case(,I) was handed down it received statutory recognition in the shape of s. 3(a) of the Central Sales Tax Act, which was enacted by the Parliament to remove any doubts or misgivings regarding the competence of a State Legislature to levy tax on inter-State sales. Section 2 ( g) of the Central Sales Tax Act defines "sale" thus : " 'sale', with its grammatical variations and cognate expressions, means any transfer of property in goods by one person to another for cash or for deferred payment or for any other valuable consideration, and includes a transfer of goods on the hire-purchase or other system of payment by ir~stal ments, but does not include a mortgage or hypothecation of or a charge or pledge on goods;" Analysing this definition it would appear that it postulates the following conditions : (i) there must be a transfer of property in goods by one person to another; --------~ (I) [1955] 2 S.C.R. 603. I (ii) (iii) BALABHAGAS v. ORISSA (Fazal AU, J.) the transfer must be for cash or for deferred payment or for any other valuable consideration; and that such a transfer includes a transfer of goods on the hire-purchase or other system of payment by instalments, etc. 945 A It would thus be seen that the word 'sale' has been given a very wide B connotation by the Parliament so as to include within its fold not only -1 sales of goods which are usually known in common parlance but also transactions which legally cannot be called sales, for instance, a trans- • fer of goods on the hire-purchase system. It seems to us that the Parliament wanted to give the widest amplitude to the word 'sale' and , ' that is why, while in s. 3 the words 'sale of goods' have been used in s. 4(2) clauses (a) & (b) which deal with the situs of the sale the c words 'contract of sale' have been used in the same sense. In other words, the word 'sale' defined in cfause (g) of s. 2 and used in s. 3 and other sections is wide enough to include not only a concluded contract of sale but also a contract or agreement of sale provided the agreement of sale stipulates that there was a transfer of property or movement of goods. In The Sales Tax Officer, Pilibhit v. Budh Prakash Jai Prakash(!) quoting Benjamin on Sale, (8th Edn.) VenD katarama Ayyara, J., who spoke for the Court observed as follows : " "The distinction between a sale and an agreement to sell under Section 1 of the English Act is thus stated by Benjamin on 'Sale', Eighth Edition, 1950 :- "In order to constitute a sale there must be- (1) An agreement to sell, by which alone the property does not pass; and (2) an actual sale, by which the property passes. It will be observed that the definition of a contract of sale above cited includes a mere agreement to sell as well as an actual £ale." This distinction between sales and agreements to sell based upon the passing of the property in the goods is of great importance in determining the rights of parties under a contract." It would thus appear that this Court clearly held that an agreement to sell by which the property did not actually pass was also an element of sale. Of course in that case the Court had to decide a different point, namely, whether it was within the competence of a State Legislature to tax not a sale but even an agreement to sell where an actual sale had not taken place. This Court held that the State Legislature was not competent to make such a levy under any statute passed by it. (1) 5 S. T. C. 193, 196. E F G H 946 SUPREME COURT REPORTS [1976] 2 S.C.R. A Section 3 of the Central Sales Tax Act, 1956 runs thus : s c "3. A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase- ( a) occasions the movement of goods from one State to another; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another." Section 3 consists of two clauses. But in the instant case we are not concerned with clause (b) but only with clause (a). Analysing clause (a) of s. 3 of the Central Sales Tax Act it would appear that before s. 3 can apply, the following facts must be established : ( i) that there is a sale or purchase of goods; and (ii) that the sale occasions the movement of goods from one State to another. If these two conditions are satisfied the sale becomes an inter-State D sale on which tax could be levied under the Central Sales Tax Act. The serious question that arises for consideration in this case is whether or not the term 'sale of goods' as used in s. 3 includes an agreement to sell. It has already been pointed out that an agreement to sell is undoubtedly an element of sale. In fact a sale consists of three logical steps-(i) that there is an offer; (ii) that there is an E agreement to sell when the offer is acc;epted; and (iii) that in pursuance of the said agreement a concluded sale takes place. When the statute uses the words "sale or purchase of goods" it automatically attracts the definition of sale of goods as given in s. 4 of the Sale of Goods Act. 1930 which is a statute passed by the same Parliament and is to some extent in pari materia to the Central Sales Tax Act so far as transaction of sale is concerned. Section 4 of the Sale of Goods F Act runs thus : G H "4. (1) A contract of sale of goods is a contract 'whereby the seller trl!nsfers or agrees to transfer the property in goods to the buyer for a price. There may be a contract of sale between one part-owner and another. (2) A contract of sale may be absolute or conditional. ( 3) Where under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale. but where the transfer of the property in the goods is to take place at a future time or sub_iect to some condition thereafter to be fulfilled. the contract is called an agreement to sell. ( 4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred." • .. • ; • BALABHAGAS v. ORISSA (Fazal Ali, J.) 947 Section 4(1), therefore, clearly provides that a contr.act of sale of goods includes also an agreement to transf~r property m go~ds to the buyer for a price. The inevitable conclusion that follows from the combined effect of the interpretation of s. 3 of the Central Sales Tax Act and s. 4 of the Sale of Goods Act is that an agreement to sell is also an essential ingredient of sale provided it contains a stipulation for transfer of goods from the seller to the buyer. This being the position if there is a movement of goods from one State to another, not in pursuance of the sale itself, but in pursuance of an agreement to sell, wliich later merges into a sale, the movement of goods would be deemed to have been occasioned by the safe itself wherever it takes place. In this view of the matter the question as to whether agreement to sell was a forward contract or a contract in respect of unascertainable or future goods would make no difference for the simple reason that when once a sale takes place. or for that matter when the goods start moving from one State to another in pursuance of the agreement to sell they cease to be future goods because they are in existence and they become also ascertainable. The argument of the learned counsel for the appellant is based on a clear fallacy because it seeks to draw an artificial distinction between a contract of sale of ascertainable goods and a contract of sale of unascertainable or future goods. This argument fails to take note of the fact that when the movement of the goods start they shed the character of either unascertained goods or future goods.· Hence for the purpose of application of s. 3(a) of the Central Sales Tax Act the question whether the contract is a forward contract or not makes no material difference. Further more. we can hardly conceive of any case where a sale would take place before the movement of goods. Normally what happens is that there is a contract between the two parties in pursuance of which the goods move and when they are accepted and the price is paid the sale takes place. There would, therefore, hardly, be any case where a sale would take place even before the movement of the g~ods. We would illustrate our point of view by giving some concrete mstances : Case No. I-A is a dealer in goods in State X and enters into an agreement to sell his goods to B in State ®· 'f In pursuance of the agree~ent A sends the goods from State X to State Y by booking the goods m the name of B. In such a case it is obvious that the sale is pr~ced~d by the movement of the goods and the movement of goods bemg m pursuance of a contract which eventually merges into a sale the movement must be deemed to be occasioned by the sale. The present case clearly falls within this category. A 11 c D E F G Case No. 11.-A who is a dealer in State X agrees to sell goods to B but. he book~ the goods from State X to State Y in his own name and his agent m State Y receives the goods on behalf of A. Thereafter the goods are delivered to B in State Y and if B accepts them a sale takes place. It will be seen that in this case the movement of H goods is ne!ther in pursuance of the agreement to sell nor )a the move- M , 1 ment occasioned by the sale. The seller himself takes the goods to 948 SUPREME COURT REPORTS [1976] 2 S.C.R· A State Y and sells the goods there. This is therefore, purely an internal sale which takes place in State Y and falls beyond the purview of s. 3(a) of the Central Sales Tax Act not being an inter-State sale. B c D Case No. lll-B a purchaser in State Y comes to State X and purchases the goods and pays the price thereof. After having purchased the goods he then books the goods from State X to State Y in his own name. This is also a case where the sale is purely an internal sale having taken place in State X and the movement of goods is not occasioned by the sale but takes place after the property is purchased by B and becomes his property. . Generally these are the only type of cases that can occur in the day to day commercial transactions. It is. 'therefore. manifest that there can hardly be a case where once a sale takes pla.ce the movement is subsequent to the sale. Mr. Hardy was unable to cite a single instance where such a contingency could arise and he accordingly submitted with his usual fairness that if no such contingency arose, then s. 3(a) of the Central Sales Tax Act will have no application and the levy cannot be made. We are unable to accept this contention because it is well settled that a statutory provision cannot be interpreted in a way which defeats the very object of the Act. It is equally well settled that the Legislature does not waste words or introduce useless or redundant provisions. In Indian Chamber of Commerce v. C.l.T. West Bengal II, Calcutta( 1) a Division Bench of this Court to which I was also a party observed as follows : "Section 2(xv) must be interpreted in such a manner that E every word is given a meaning and not to treat any expression as redundant or missing the accent of the amendatory phrase." In view of these circumstances we cannot hold that s. 3 (a) of the Central Sales Tax Act was redundant or would apply to contingencies which may not happen at all. In these circumstances, therefore, the F conclusions at which we arrive may be summarised as follows : G H (1) That the word 'sale' appearing ins. 2(g) as also ins. 3(a) of the Central Sales Tax Act includes an agreement to sell also provided the said agreement contains a stipulation regarding passing of the property. Even in the Bengal Immunity Company Ltd's case (supra) this Court observed thus : ". . . . . . the expression "contract of sale" in this context has the same meaning as the words "contract of buying and selling" in the definition of inter-State commerce given by Rottschaefer in the passage already quoted, and they both refer to the bargain resulting in the sale irrespective