TMI Blog1970 (4) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... artificial rule that the accretion may be presumed to have become by virtue of affixing to a chattel, part of that chattel, but from the intention of the parties to the contract - Civil Appeal No. 1691, 1692 of 1966, - - - Dated:- 13-4-1970 - SHAH J.C., HEGDE K.S. AND GROVER A.N. JJ. None for the respondent. I.N. Shroff, Advocate, for the appellant. -------------------------------------------------- The judgment of the court was delivered by HEGDE, J.- These appeals by special leave arise from the decision of the High Court of Madhya Pradesh in references made to that court under section 44 of the Madhya Pradesh General Sales Tax Act, 1958 (to be hereinafter referred to as "the Act"). The sole question th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxed on that turnover and further penalty was levied on him under section 18(6) of the Act. During the assessment period April 1, 1959, to March 31, 1960, the assessee under two different contracts, similar to those mentioned earlier, received a sum of Rs. 37,728.13 from the S.E. Railway. The sales tax authorities have levied tax on the said turnover and further have levied penalty on the assessee under section 18(6). The main features of the contracts with which we are concerned in these appeals are: (1) the assessee was to quarry stones from the quarries belonging to the South Eastern Railway and (2) he was to break those stones into pieces and convert them into ballast of a specified size and thereafter supply them to the S.E. Rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department laid stress on certain clauses in the agreements between the assessee and the S.E. Railway. Under one of the clauses in those agreements, the assessee was required to remove from the railway premises all rejected ballast. On the strength of that clause, it was urged that the assessee was the owner of the ballast. We are unable to accept that contention. Rejected ballast was useless for the railway. Therefore it was arranged under the contract that the assessee must remove those ballast. The only other clause in the agreement on which reliance was placed was clause (15). That clause reads: "Without the sanction of the railway, no materials of any kind, whether required for the performance of this agreement or not shall be quarr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whole of the materials used by him may have been his property. In the case of a contract for sale, the thing produced as a whole has individual existence as the sole property of the party who produced it, at some time before delivery, and the property therein passes only under the contract relating thereto to the other party for price. Mere transfer of property in goods used in the performance of a contract is not sufficient; to constitute a sale there must be an agreement express or implied relating to the sale of goods and completion of the agreement by passing of the title in the very goods contracted to be sold. Ultimately the true effect of an accretion made pursuant to a contract has to be judged, not by an artificial rule that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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