TMI Blog1978 (8) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the case, the transaction in which the dealer obtained 'kansa' (raw material) from his customers and supplied utensils of the same weight and charged only labour charges will be a sale liable to sales tax under the M.P. General Sales Tax Act, 1958." 3.. The relevant period of assessment in these two references is 1st July, 1964, to 30th June, 1965, and 1st July, 1965, to 30th June, 1966. The assessee is a co-operative society registered under the M.P. Co-operative Societies Act, 1960. It is a registered dealer under the M.P. General Sales Tax Act, 1958. The assessee manufactures utensils made of "kansa" (an alloy). The transactions in question are those in which the society sold "kansa" utensils, after receiving from the customer ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of which they are not taxable under the Act. At the instance of the Commissioner of Sales Tax, the aforesaid question has been referred by the Tribunal for the decision of this Court. 5.. The findings recorded by the Tribunal as well as the question referred show that the transaction in question is one in which equal weight of "kansa" (raw material) of which the utensils are made, is supplied by the customer to the assessee and that is the substantial consideration for transfer of property in the utensils by the assessee to the purchaser and that the money paid as consideration only represents the labour charges of making the utensils. The question is whether a transaction of this kind amounts to "sale". 6.. It is settled that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision Bench of the Allahabad High Court in Sales Tax Commissioner, U.P. v. Ram Kumar Agarwal[1967] 19 S.T.C. 400. with which we are in respectful agreement. The transaction in that case was one where ready-made ornaments of gold manufactured by a goldsmith were transferred in consideration of equal quantity of gold given by the customer in addition to the labour charges for making the ornaments. The ornaments were prepared by the goldsmith out of gold purchased in the market by him and an equal quantity of gold was supplied by the purchaser only at the time of purchase of the gold ornaments. It was not as if the goldsmith prepared ornaments only out of the gold supplied earlier by the purchaser. Such transactions were held to be not "sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ........ The term 'money' has also a legal meaning as well as a popular sense both of which bar the inclusion of bullion or metal of any kind as such in the concept of 'money'. After all, we are not concerned with what may pass for money in exceptional conditions or under the special usages and customs of a peculiar or commercially backward or primitive society. Legally speaking, 'money' is just what is 'legal tender', or what a tradesman is legally bound to accept under the law of the country. The term 'money' is explained in the Shorter Oxford English Dictionary as follows: 'In modern use applied indifferently to coin and to such promissory documents representing coin (esp. bank notes) as are currently accepted as a medium of exchange.. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased by the goldsmith from the market for making the ornaments, but that purchase of gold was entirely for himself with which the customer was not concerned. The customer paid the whole consideration in money as price of the ornaments purchased by him. The facts of that case were, therefore, different from the abovesaid Allahabad High Court case[1967] 19 S.T.C. 400., in which the customer had supplied the requisite quantity of gold used for making the ornaments and money was paid only towards labour charges for making the ornaments, as in the transactions before us. However, this Court, while deciding that case, laid down the test to be applied for deciding whether the transaction amounts to "sale" for the purposes of the State Sales Tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplying the raw material in kind, and not to pay the price of the finished product. 9.. In Chalmer's Sale of Goods (16th Edition), for distinguishing a transaction of sale from that of work and materials, the test to be applied is indicated as under: "If the real substance of the contract is the performance of work by A for B, it is a contract for work and materials notwithstanding that the performance of the work necessitates the use of certain materials and that the property in those materials passes from A to B under the contract." However, in the present case, it is not necessary for us to decide whether the transaction amounted to a works contract or a transaction of barter or exchange and the only thing necessary to decide is wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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