K. Veeraswami, J.
1. These petitions involve a common point and have been heard together. The assessee has been charged to sales tax on his transactions of sale of gold jewels. But we are concerned with the assessment years 1959-60 to 1963-64; except for the year 1963-64, it is a case of re-assessment for the other years. The assessee's case that he received gold with which he made jewels and supplied the same to the customers after collecting the labour charges was not accepted by the Department as well as the Tribunal. But the finding of the Tribunal is that the assessee supplied gold jewels and in consideration therefor received equal weight of gold and labour charges for making jewels. Such transactions have been considered to be sales of goods. The question is whether this view is correct.
2. 'Sale' has been defined by the Act as any transfer of property in the goods for cash or for deferred payment or other valuable consideration. What is implied by ' other valuable considerations 'is the question. The Sale of Goods Act defines ' sale ' as transfer of property in goods for money consideration. State of Madras v. Gannon Dunkerley E. & Co. (Madras) Ltd. : 1SCR379 , held that 'sale of goods' in Entry 92-A of List I as well as entry 54 of List II in the VII Schedule to the Constitution should be understood in the light of the legislative practice in relation to sale of goods both in England and in India. Venkatarama Aiyar, J., speaking for the Court stated ::
Thus, according to the law both of England and of India, in order to constitute a sale it is necessary that there should be an agreement between the parties for the purpose of transferring title to goods which of course pre-supposes capacity to contract, that it must be supported by money consideration, and that as a result of the transaction property must actually pass in the goods. Unless all these elements are present there can be no sale.
3. Elucidating ' money consideration ' Devi Das Gopal Krishna v. State of Punjab (1969) 1 S.C.J. 19 : (1969) 1 : I.T.J. 224 : 20 S.T.C. 430, pointed out ::
The expression ' valuable consideration ' takes colour from the preceding expression ' cash or deferred payment.' If so, it can only mean some other monetary payment in the nature of cash or deferred payment.
4. That decision was rendered in the light of the definition of ' purchaser' in the Punjab General Sales-tax Act of 1948, but the principle applies to and governs the interpretation of related provisions in the Madras General Sales-tax Act of 1959.
5. Can it be said that gold is in the nature of cash? What is in the nature of cash need not necessarily be cash itself. Money is not necessarily confined to coins or currency notes. We are inclined to think that it has a wider connotation and sense. The entire monetary system, both national and international, is based on gold and silver reserves. When currency is used, it is as representing its value in gold or silver. Though gold and silver are not in circulation and used as currency as such nevertheless it being the basis on which the monetary system of a country is rested, we are inclined to think that gold in a sense may be regarded as something in the nature of money. The Concise Oxford Dictionary gives the meaning of ' money ' as ' a coin in reference to its purchasing power of property viewed as convertible into money.' It is not necessary for us to decide whether property other than gold or silver, or in other words, jewels, can be regarded as money. Take for instance the phrases ' make money,' 'moneyed man,' ' time is money,' 'not every man's money' and the like. Obviously, in the context, money, in the expressions, does not carry the sense of cash or currency. Gold being, therefore, in the nature of money, as we are inclined to understand the expression, payment by gold may be regarded in our opinion, as a payment in the nature of cash or as a money consideration in the context of sale of goods.
6. Govinda Menon, J., had to consider a similar case in Jayarama Chettiar, In re 1950 1 S.T.C. 168, and the learned Judge was inclined to think that payment in silver was payment in the nature of money consideration. The ambit of expression ' sale of goods ' in the Legislative entries was no doubt not kept in view in that case, but nevertheless the fact remains that the learned Judge was inclined to think that purchase of silver articles, in payment of the consideration in the form of silver, amounted to sale of goods. In our opinion, there is justification for this view.
7. There is also another approach to the question. Gold handed to the assessee could easily be converted into money at his hands and the same be applied as payment in cash for the purchase of jewels from the assessee.' Payment by handing equivalent weight of gold had the import of dispensing with the necessity of that process. Viewed in that way too, the assessments or re-assessments on the view that the assessee effected sales of gold jewels, have to be accepted as valid.
8. In all these cases the Revenue has imposed penalties. In the particular circumstances, of this case, we are inclined to think, especially in view of the fact that the question we have decided is not entirely free from doubt, the levy of penalty was not justified. The petitions are, therefore, dismissed except W.P. No. 1462 of 1967 in so far as they relate to penalties. In other respects, all the petitions are dismissed. No costs.