TMI Blog1978 (11) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... exure P-1). The petitioner has challenged both those orders by this writ petition. 2.. The petitioner's contention is that the nature of the business done by it is that of "works contract". Relying upon the decision in Assistant Sales Tax Officer v. B.C. Kame[1977] 39 S.T.C. 237 (S.C.); A.I.R. 1977 S.C. 1642., the petitioner contends that the turnover has wrongly been held to be "sales" and the assessment of sales tax on such turnover is, therefore, illegal and without jurisdiction. 3.. In order to appreciate the contentions raised by the parties, it shall at this stage be proper to state the process involved in the preparation of a rubber-stamp. The petitioner has filed an affidavit on 19th October, 1978, detailing the process of makin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch rubber-stamp shall serve a particular purpose to that particular customer. It may not be of any use or service in general. There may, however, be rubber-stamps prepared generally and not on the asking of any individual. Such rubber-stamps shall be of use to any buyer and be available for sale and be sold as a commodity in general. In the first type may fall stamps bearing the name of an individual, a particular office and the like; the latter category may include stamps containing impression like the words "True copy", etc. The sale of the stamps falling in the second type of stamps involves transfer of commodity for which the price is paid. This is apparently a sale of goods. However, the first type of stamps do not have a general ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the production of the portrait, that does not make any difference to the result, because the substance of the contract is the skill and experience of the artist in producing the picture. " Earlier also the Supreme Court in Chandra Bhan Gosain v. State of Orissa[1963] 14 S.T.C. 766 (S.C.). emphasised the test to determine whether a given transaction is a sale or a contract for work is to ascertain if the transaction involved transfer of chattel qua chattel for price. Their Lordships were considering the supply of bricks which had to be prepared according to certain specifications and would require certain amount of skill and labour. It was held that as the essence of the contract was the delivery of bricks, it was a transfer of chattel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made the subject-matter of sales tax. We, therefore, find that the entire turnover of the petitioner is not liable to be assessed to sales tax. Instead the proceeds obtained as a result of execution of any particular work order shall not be liable to be taxed. 6.. A decision in J. Marcel (Furriers) Ltd. v. Tapper[1953] 1 All E.R. 15. relied on by the respondents only remains to be considered. In that case, the retail furriers, who prepared furs and fur garments, stitched a mink jacket of a selected style and colour. It was held that the contract for preparing that jacket was not a works contract but was a contract for sale of goods. It can well be seen that the contract for stitching a jacket of a given style out of cloth selected of a p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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