P. R. GOKULAKRISHNAN, J. ( 1 ) THIS petition is a vivid illustration of an easily avoidable litigation. Has not the Department adopted a course which is basically unsupportable ? Has not an honest assessee been driven to file the present petition? Would not a proper approach in the matter by the Department have saved time and money of all concerned ? These are some of the questions that need to be examined in the above petition. ( 2 ) THE basis of the petition is three show cause notices all dated 25/02/1970 The petitioner is a partnership firm carrying on business of sale inter alia of trucks and chassis mostly on hire-purchase basis at Rajkot. The petitioner is a registered dealer under the Bombay Sales Tax Act 1959 being registered for selling cars trucks motorcycles spare parts etc. During the period from 1/01/1960 to 31/12/1962 the petitioner had entered into agreement with various parties on hire purchase systems in respect of truck chassis. Under this hire-purchase system the party usually agreed to pay the amount by certain instalments every month the period ranging between 7 months to 24 months depending on each individual case. As per this agreement the hirers i. e. the parties would become the owners of the truck on the exercise of the option to purchase after the payment of the last instalment. . . . . . . . . . . . . ( 3 ) IT is the case of the petitioner that instead of finalising the assessment and taking the sales tax paid into consideration the first respondent issued three notices all dated 25/02/1970 under Sec. 37 of the Bombay Sales Tax Act 1959 stating that the petitioner had collected the following amounts by way of sales tax in violation of Sec. 46 and therefore the petitioner should show cause as to why the said amounts should not be forfeited and why penalty should not be levied under Sec. 37 (2) of the Sales Tax Act. ( 4 ) IN the abovesaid decision (Ramkrushnna Kulwantrai v. Commissioner of Sales Tax, 44 STC 117) the Department contended that even transactions which are not transaction of sale are included within the ambit of Sec. 46. Repelling this contention the Bombay High Court held that they are completely surprised at such an argument. ( 4 ) IN the abovesaid decision (Ramkrushnna Kulwantrai v. Commissioner of Sales Tax, 44 STC 117) the Department contended that even transactions which are not transaction of sale are included within the ambit of Sec. 46. Repelling this contention the Bombay High Court held that they are completely surprised at such an argument. According to the Bombay High Court the very sentence begins by referring to the amounts collected from buyers and that there cannot be a buyer unless there is a seller and a contract of sale. It has been further held in the decision:"consequently. On a true and correct interpretation of Sec. 46 (2) of the Act It is not correct in law to say that the latter part of Sec. 46 (2) is wide enough to take within its fold even transactions which do not amount to sales and in concluding that amounts collected by way of tax on such transactions are liable to be forfeited under Sec. 37 (1) (a) of the Act To construe Sec. 46 as authorising a prohibition against collection of tax in respect a transaction which Is not a transaction of sale or purchase and thus as a complementary thereto as authorising the State Government under Sec. 37 (1) to forfeit such amount would be unconstitutional as being beyond the legislative competence of the State Legislature. " ( 5 ) WE have carefully considered all these contentions. Simply because there is a mention of sales-tax collection when especially there is no sale as such in this case the authority concerned cannot term such collection as sales tax collection. The nomenclature as such for any collection made will not bring such collection under the category of collection of sales tax to attract the mischief under Sec. 37 (1) read with Sec. 46 of the Sales Tax Act. Further as correctly contended by Mr. Kaji in this hire purchase agreement it is in the last instalment that the sales tax if any are said to have been collected. Hence there is noquestion of the petitioner collecting the sales tax in advance as contended by Mr. G. D. Bhatt. ( 6 ) FROM the discussions we have made above it is clear that the sales tax is liable only in respect of the sale of certain property. Hence there is noquestion of the petitioner collecting the sales tax in advance as contended by Mr. G. D. Bhatt. ( 6 ) FROM the discussions we have made above it is clear that the sales tax is liable only in respect of the sale of certain property. Admittedly the petitioner has entered into a hire purchase agreement and apportioned certain amount as sales tax by mentioning in the bill including sales tax. The hire purchase agreement cannot be construed as a sale and the sale comes in only on the payment of the last instalment and the purchaser exercising his option to purchase. In those circumstances it is not correct to say that there is a sale in the transaction entered into by the petitioner and his hirers and that the amount mentioned as inclusive of sales tax is collection of sales tax. If it is not a sale in the eye of law which requires the sale as a condition precedent for imposing the tax there is no question of invoking the Sec. 37 or 46 of the Sales Tax Act. On this short ground also we have to hold that the notices impugned which are at Annexure C to the Special Civil Application are without jurisdiction and the same have to be quashed. In view of this conclusion we have arrived at it is unnecessary for us to answer the other contentions raised by Mr. Kaji. ( 7 ) THE aforesaid discussion clearly shows that the said show cause notices are clearly misconceived. It does seem that in this particular case the Department has adopted a course which is basically unsupportable and an honest assessee has been unnecessary penalised. If the Department has correctly appreciated the situation then undoubtedly the time and money of all concerned would have been saved. ( 8 ) APART from the aforesaid there is one more angle from which such Departments should view the situation. The purpose of the notices is two-fold namely to treat the said sums which are shown as sales tax as amounts collected by way of tax in contravention of Sec. 46 and to forfeit them and the other purpose is to impose a penalty under sub-sec. (2) of Sec. 37 of the said Act. The purpose of the notices is two-fold namely to treat the said sums which are shown as sales tax as amounts collected by way of tax in contravention of Sec. 46 and to forfeit them and the other purpose is to impose a penalty under sub-sec. (2) of Sec. 37 of the said Act. Thus on one hand the said amounts are sought to be forfeited and penalty levied and on the other hand undoubtedly on completion of the transactions on the basis of payment of last instalment regular sales tax would be claimed from the same assessee This would lead to travesty of justice on the face of it simply because a proper approach has not been taken by the authorities concerned. As stated above such an approach is impossible since there is no sale at all when mere instalments are paid in hire purchase agreements. It does not need much thought to appreciate that an honest assessee would be penalised merely because a wrong approach has been made by the authorities concerned. (REST of the Judgment is not material for the Reports.)RULE made absolute. .