TMI Blog1975 (12) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the contract. The contract provided inter alia that the assessees would duly perform their works described in the schedule thereto and execute the same with great promptness, care and accuracy in a workman-like manner to the satisfaction of the railway and would complete the same in accordance with the said specifications and the said drawing and the said conditions of the said contract on or before 15th January, 1962, and would maintain the said works for a period of twenty-four calendar months from the certified date of their completion. The contract further provided that if the assessees duly performed the said works in the manner aforesaid and observed and kept the said terms and conditions, the railway would pay or cause to be paid to the assessees for the work done on final completion thereof the amount due in respect thereof at the rates specified in the schedule annexed to the contract. The description of the items and particulars given in the schedule are as follows: "Name of work: Supply and laying of 2 underground cables 22 KV grade making cable joints, sealing boxes, etc., between Grant Road SubStation to Parel Meter House and 1 cable between Bandra Sub-Station t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer and the Assistant Commissioner of Sales Tax, on appeal, included the amount paid by the railway to the assessees for the supply of cables in the taxable turnover of the assessees. The assessees then went by way of second appeal to the Sales Tax Tribunal. The Tribunal came to the conclusion that the contract between the assessees and the Western Railway was clearly divisible, one part of the contract being for the supply of cables to the railway and the second part of the contract relating to the laying of the underground cables. The Tribunal observed that the fact that 300 yards of cables remaining unused were retained by the railway because it was their property showed that the contract was not merely a works contract. The Tribunal further observed that the charges for the work and labour involved were separately shown and worked out. On these conclusions the Tribunal held that the contract was clearly divisible and upheld the decision of the Assistant Commissioner. This reference has been preferred at the instance of the assessees against the decision of the Tribunal. The only question which arises for our consideration is whether the contract between the assessees and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he railway, shows that the contract in question is a severable one in so far as the supply of the cables to the railway is concerned. As against this, it was urged on behalf of the assessees that there were several factors in the contract which showed that the contract was an indivisible contract of work and labour or what is known as a "works contract". Mr. Trivedi, the learned counsel for the assessees, emphasised that the contract provided that the work had to be done in a workman-like manner and in accordance with the drawing annexed to the contract. These terms, in our view, relate to the part of the contract regarding the laying of the cables and do not necessarily suggest that the contract was an indivisible works contract. The same can be said of the terms in the contract regarding inspection and testing of the installation on completion of the work. Mr. Trivedi emphasised that the contract enjoined a liability on the assessees to rectify the defects in the work. This again is not of much importance because, as we have already pointed out, there is also a distinct guarantee given whereby the assessees are responsible for any defect in the material. It was next emphasised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e invariable practice when tenders are called for to require such particulars to be furnished. The mere break-up of the figure in this manner does not lead to the conclusion that there was a stipulation of the sale of the machinery simpliciter." In our view, this decision is not of much help in the case before us. In the first instance, there is nothing in the judgment to show that any specific amount was mentioned as being payable on account of the goods to be supplied. Moreover, the contract in question there was one which involved a very high degree of technical skill and competence, whereas in the case before us, although undoubtedly some skill might be required in the laying of cables there is nothing to show that this skill had to be of a very high kind. Apart from this, we must observe that although whether the contract is one for a lump sum payment or not may not be decisive of the question, as to whether the contract is indivisible or not, this factor would undoubtedly have great relevance in the decision of that question. Mr. Trivedi then relied on the decision of the Supreme Court in State of Rajasthan v. Man Industrial Corporation Ltd.[1969] 24 S.T.C. 349 (S.C.). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along with the construction of the building with the assessee rendering technical assistance to the architects and other construction contractors during the course of the erection of the building. It was held that as the installation of the humidifying plant and the components which were to be supplied therefor under a composite contract with the customer necessarily involved the embedding of such a plant and its components in the structure, it could not be said that the plant and the parts could be viewed de hors the totality of the contract, which could be said to have been executed only after the completion thereof and after the machinery and plant were embedded in the structure as a whole. This case also turned on its own facts and is distinguishable from the case before us and we cannot derive much assistance from the decision therein. In the first place, it was a lump sum contract. Secondly, the work required to be done by the assessee in that case involved a much higher degree of skill and competence than the work to be done by the assessees in the present case. Moreover, in that case there is a finding that the property in the machinery and plant supplied by the assessee pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that for the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case. It is quite clear that where there is a question of the property passing in movable property, the question of intention of the parties is most material. Had this question been raised before the Tribunal, evidence could have been led on the question of intention. No such evidence seems to have been led by either side in the present case. The judgment of the Tribunal shows that the only evidence, which appears to have been produced by the assessees, consisted of a supplementary paper book supplied by the assessees referring to the various terms and conditions in the contract and certain other documents, none of which throw light on this question. In view of this, it is not open to the assessees to take up this contention at this stage at all. In the result, the question referred to us must be answered in the affirmative and the assessees must pay the costs of the reference fixed at Rs. 250. The fee of Rs. 100 deposited by the assessees to be appropriated towards these costs. Reference answered in the aff ..... X X X X Extracts X X X X X X X X Extracts X X X X
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