BLOG ON THE TOPIC OF SALES OF GOODS ACT

1. Introduction:

One of the main forces behind an economy is frequently mentioned as trade.  The western world's persistent demands for India to welcome foreign investment in retail trading are an excellent representation of how crucial trade is.  Understanding the laws controlling commerce is crucial given how important it is to a nation's economy.  The sales of goods Act, 1930, also known as "the Act," regulates the selling of commodities in India.  The Sale of Goods Act governs the sale of certain moveable property, such as goods, whereas the Transfer of Property Act, 1882 governs the transfer of immovable property.  Previously, this Act was a component of the 1872 Indian Contract Act. However, a separate Act was carved out in 1930 because it was felt that a separate, allocated part of legislation was necessary.  Let's look at some of this Act's salient features.

2.              History of sales of goods act:

Until July 1, 1930, the law relating to the  trade of goods in India was governed by Chapter VII( Sections 76 to 123) of the Indian Contract Act, 1872, which was grounded on English Common Law. still, the English trade of Goods Act, 1893, had codified these principles more  exhaustively to suit evolving mercantile  requirements. By 1920, it was  honored that the  vittles under the Indian Contract Act were outdated and  inadequate to address contemporary  marketable practices. The judicial developments reflected in the English Act were missing in the Indian  frame. thus, the Legislative Department conducted a detailed study of the applicable case law, and a draft Bill was prepared in 1928. A Special Committee of legal experts and a Select Committee further revised it. Accordingly, the Indian trade of Goods Act, 1930( Act III of 1930), was  legislated, repealing Chapter VII of the Contract Act and incorporating essential English principles with suitable  variations.

3.              Definition of Important Elements of Sales of goods Act, 1930

Section 4(1) defines a contract of sale as under:

A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in the goods to the buyer for a price.

1. It means in order to constitute a sale: The contract must be held between two parties; one party who sells the goods is the seller, and the other party who agrees to purchase or buy the goods is the buyer.

2. The essence of the Sales of Goods Act is "goods" given under section 2(7).

3. The seller transfers or agrees to transfer the goods in property to the buyer, i.e., ownership. (When transferring the ownership, it is called a sale, or when agreeing to transfer the property, it is called an agreement to sell). 

4. The consideration for the sale of goods is "price," which must be in money form given under section 2(10).

To understand whether a contract made under statutory compulsion amounts to a valid sale despite absence of free consent.

Andhra Sugars Ltd. v. State of A.P. 

In this case, the Supreme Court held that a  trade under statutory  coercion, like under the Andhra Pradesh Sugarcane Act, remains valid. The Court observed that legal  coercion doesn't negate  concurrence, and such a  sale still constitutes a  trade under Section 4 of the trade of Goods Act.

4.              Types of Goods (Sale of Goods Act)

Under the trade of Goods Act, goods are classified as

1. Existing Goods- formerly possessed by the dealer.
2. Future Goods- Yet to be made or acquired.
3. Contingent Goods- Depend on a future uncertain event.

Note: Existing Goods are further divided into “specific”, “ascertained”, and “unascertained goods”.

Landmark Judgment about whether intangible items like electricity could be classified as "goods" for the purpose of levying sales tax.

In “Commissioner of Deals duty, MP v. MP Electricity Board” , the Supreme Court held that electric energy qualifies as" goods" for deals  duty purposes, as it possesses characteristics of  portable property — being  transmittable, deliverable, and  ready-made — despite its impalpable nature. The Calcutta High Court affirmed this in  “Associated Power Co. Ltd”.

5.              Difference between sale and agreement to sell

“According to Sec. 4, sub-sec. (3), if the property is transferred at the time of the making of the contract, the contract is known as a sale. But if, on the other hand, the transfer of property in the goods is to take place at a future time or subject to some conditions thereafter to be fulfilled, the contract is called an agreement to sell.”

6.              Conclusion

The trade of Goods Act, 1930 plays a vital  part in regulating  marketable deals involving  portable goods in India. It provides a clear legal  frame distinguishing between a  trade and an agreement to  vend, and defines  crucial  rudiments like goods, price, and power transfer. The addition of statutory  coercion cases like * Andhra Sugars Ltd. v. State of A.P. * clarifies that  similar deals may still qualify as valid deals under the Act. also,  corner judgments have expanded the  description of goods to include impalpable  means like electricity,  buttressing the Act’s rigidity to  ultramodern  profitable  requirements and trade realities.

 

Closing Credits

Author: IKRA BANO
Affiliation: JAMIA MILLIA ISLAMIA

"The views expressed are personal. This article is intended for educational purposes and public discourse. Feedback and constructive criticism are welcome!"