TMI Blog1962 (6) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... actory Limited (hereinafter called "the sugar factory"), which is also a joint stock company engaged in the business of manufacturing sugar primarily, and the Government of Andhra Pradesh. Before the assessing authority, the assessee's turnover in relation to both of them was disputed, but, both before the Appellate Tribunal as well as before us, the contention is confined only to the sales made to the sugar factory. The assessee-company agreed to supply to the sugar factory 1,300 tons of the fertilizer mixture having the following ingredients: 77.7 parts of groundnut oil-cake containing 6% organic. 12.5 ammonium sulphate containing 20% inorganic nitrogen. 6.3 parts of single superphosphate containing 16% phosphoric acid. 3.5 muriate potash containing 58% potash. ----- 100.00 parts. (This mixture analysis is as follows): 7.55% nitrogen (2.5% inorganic and 5.05% organic). 1.00% P. 205. 2.00% potash. It was further agreed that the sugar factory should supply the assessee-company 1,000 tons of groundnut oil-cake to be used in this mixture, and that the assessee-company would purchase the other ingredients at prices subject to the confirmation by the sugar facto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oil-cake to be used in the mixture, and that the assessee-company had to make its own arrangements for the purchase of other ingredients, prices subject to the confirmation of the sugar factory. After knowing the exact rates of the ingredients, the sugar factory would fix a definite price for the fertilizer mixture. It also mentioned that the necessary bags for packing would be supplied by the sugar factory to the assessee-company's factory at Bodhan. On 12th April, 1957, the assesssee-company addressed another letter. Therein rates of the several ingredients per ton were mentioned. Regarding groundnut oil-cake delivered, an approximate cost at Rs. 240 per ton was fixed. Then the following statement was made:- "According to the prices of raw materials mentioned above, the mixture will cost Rs. 308-98 nP. as per details below: Rs. np. 77.7 parts groundnut cake @ Rs. 240 186-48 " 12.5 parts A, sulphate @ Rs. 380 47-50 " 6.3 parts superphosphate @ Rs. 250 15-75 " 3.5 parts sulphate of potach @ Rs. 450 15-75 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n raised before the Tribunal that it was a works contract, the learned counsel took up the stand before us that the price of the mixture is not Rs. 367-73 nP., but only Rs. 122-50 nP. This contention also cannot prevail. Section 2(n) of the Andhra Pradesh General Sales Tax Act, VI of 1957. (hereinafter called "the Act") defines "sale" thus: "'Sale' with all its grammatical variations and cognate expressions means every transfer of the property in goods by one person to another in the course of trade or business, for cash. or for deferred payment, or for any other valuable consideration, and includes.............." According to section 2(s) of the Act, "turnover" means: "The total amount set out in the bill of sale (or if there is no bill of sale, the total amount charged) as the consideration for the sale or purchase of goods (whether such consideration be cash, deferred payment or any other thing of value) including any sums charged by the dealer for anything done in respect of goods sold at the time of or before the delivery of the goods and any other sums charged by the dealer, whatever be the description. name or object thereof." It is clear from the definition of "sale" t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate of Madras[1960] 11 S.T.C. 507., H. Abdul Bakshi and Brothers, Hyderabad V. The State of Andhra Pradesh[1960] 11 S.T.C. 526. The Guntur Tobaccos Ltd., Guntur v. Government of Andhra (now Andhra Pradesh[1961] 12 S.T.C. 668. and Vishweswaradass Gokuldass v. The Government of Madras[1962] 13 S.T.C. 113. The question for consideration in The State of Andhra Pradesh v. Sri Krishna Power Press[1960] 11 S.T.C. 498. ( was, whether in a case where the printing press itself purchased stationery and did the printing work upon it, as per the orders of the customers, and supplied the printed stationery at an agreed price, the transactions were sales liable to sales tax, and not works contracts, it was held that they were sales liable to sales tax. The learned Judges held that the fact that the goods prepared by the assessee would not be exhibited for sale to the general public is not decisive of the matter, but the only test is, whether the contract is for the sale of finished products. They followed the distinction between a sale, and the work and labour contract, pointed out in Benjamin's Treatise on Sale, 8th Edition, which is apposite: "3. Accordingly (i) Where the employer delivers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court in State of Madras v. Gannon Dunkerley Company (Madras) Limited[1958] 9 S.T.C. 353., was followed in that case. My learned brother, Satyanarayana Raju, J., who spoke for the Court, observed at page 674 thus: "Now, there can be three types of contracts: for work and labour simply, a mixed contract of labour and materials, and another for goods sold and delivered. The first and last categories of contract present no difficulty. With regard to the first of them, there is no sale, for the supply of labour and work is not a contract of sale of goods, as labour and work cannot be deemed to be 'goods' in any sense of the term. With regard to the third of them, the transaction is indisputably one of sale but where, as here, there is a mixed contract of work and labour and materials, the question is whether the work and labour is of the essence of the contract or whether it is the materials that are supplied. It is possible that even in this class of cases, the parties might enter into distinct and separate contracts, one for the transfer of materials for money consideration and the other for payment of remuneration for services and for work done. In such a case there are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, no element of sale when the sheets and rings were handed over to the customer and what was collected from the customer was in substance and effect the charges for converting the old metal into new sheets and rings and there was no liability on the assessee to pay any sales tax. It was found by the learned Judges that there being no purchase of the scrap, the assessee had no property in the sheets or the rings made therefrom, and there was no sale involving an element of transfer, and that what all happened was that in lieu of the old scrap of metal, the customer received the purified metal cast into sheets and rings. This decision was followed in Vishweshwaradass Gokuldass v. The Government of Madras(1). These two decisions, therefore, would not render any assistance to the petitioner as the facts therein are different. In Vishweshwaradass Gokuldass v. The Government of Madras[1962] 13 S.T.C. 113., it was held that even a barter or exchange of goods might become a sale under the Sales Tax Act provided there is transfer of property in the goods and such transfer is in the course of trade or business. The fact that instead of receiving cash, the assessee received groundnut cake ..... X X X X Extracts X X X X X X X X Extracts X X X X
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