Distinguishing Sale and Agency: Supreme Court Imposes Service Tax on CNG Distribution Outlets
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Case: COMMISSIONER OF SERVICE TAX MUMBAI v. M/S BHARAT PETROLEUM CORPORATION LTD. ETC.
Court: Supreme Court of India
Date: 20-07-2026
Law: Central Excise Act, Indian Contract Act, Sale of Goods Act.
Highlights of the Judgment:
- Interpretation of "Business Auxiliary Service" and "Commission Agent" under Section 65(19) of the Finance Act, 1994.
- The legal distinction between a contract of "sale" under the Sale of Goods Act, 1930, and "agency" under the Indian Contract Act, 1872.
- Application of the passing of property, title, and risk as the litmus test for determining transaction types.
- Judicial determination of whether a profit margin constitutes a non-taxable trade discount or a taxable commission.
- The principle that contractual nomenclature is not determinative of the jural relationship between parties.
- Analysis of key precedents on agency and pricing control, including "Future Gaming Solutions" and "Bhopal Sugar Industries".