9911796707
TMI Blog1977 (4) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... n & Structural Division), Bharatpur (hereinafter referred to as the company), under article 226 of the Constitution praying that it may be determined whether the contract of the company with the Union of India for the supply of wagons is in the nature of contract for sale of goods or a works contract and if it is found to be a contract for sale, then the Union of India may, by issuing an appropriate writ, order or direction, be prohibited from claiming a refund from the company of an amount of Rs. 1,58,703.20, which is lying with the company for the payment of sales tax; and further the Union of India may be directed through the Railway Board to reimburse the petitioner in respect of the sales tax for the purchase of wagons made by the Railway Board from the company from month to month. The company has, in this writ petition, impleaded as respondents the Commercial Taxes Officer, Special Circle II, Jaipur, the Union of India through the Railway Board and the State of Rajasthan. The facts giving rise to this petition are, briefly stated, as follows: The petitioner-company entered into a contract with the Union of India through the Railway Board for the manufacture and supply of wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Sales Tax Act, which, according to the company, would have saddled the company with a further liability to pay tax at the enhanced rate on the purchase of the material used for the manufacture of wagons. The Commercial Taxes Officer, Special Circle II, Jaipur, provisionally assessed the petitioner-company for sales tax on the sale of wagons by the petitioner-company to the Railway Board under section 7B of the Rajasthan Sales Tax Act for the month of May, 1968, and issued a demand notice for an amount of Rs. 1,91,827.79 which included the amount of penalty of Rs. 1,899.29. The company was registered as a dealer under the Sales Tax Act and, therefore, primarily it had to bear the charge of sales tax, though the incidence of the tax ordinarily passes to the purchaser in the absence of a contract to the contrary under the provisions of section 64-A of the Sale of Goods Act, but the stand taken by the Railway Board created a very odd situation for the petitioner-company because the Railway Board called upon the company not to pay the tax and, on the contrary, asked to refund the amount of tax paid to it. By its letter dated 14th August, 1968, the Railway Board categorically informe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the contract in dispute. Mr. Narsa Raju, appearing on behalf of the Union of India, at the very outset requested the court that the Union of India would very much like the dispute to be resolved by this court by exercising its extraordinary jurisdiction under article 226 of the Constitution. Mr. M. M. Vyas, appearing on behalf of the State of Rajasthan, also ultimately conceded that in the special circumstances of this case, he would not like to press his objection about the jurisdiction of this court to entertain this writ application. We are not unaware of the limitations that the High Courts have put on themselves for exercising the extraordinary jurisdiction under article 226 of the Constitution. We know that such a jurisdiction should be sparingly used and should not be allowed to be substituted for the ordinary remedies available at law, but the courts do not hesitate to allow the aggrieved parties to invoke this extraordinary jurisdiction if they find that it is a case of palpable injustice to the party and he is unnecessarily dragged to enter into a long protracted litigation which may not be an effective and speedy remedy to seek the desired relief. We can do no bett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided by the Act." The pronouncements of the Supreme Court throw sufficient light on the wide powers conferred on the High Courts by the founding fathers by framing article 226 in a comprehensive phraseology and it has been the consistent view of the courts in India that if the petitioner is subjected to palpable injustice for which the remedies provided by the ordinary law are not efficacious, the courts should not feel hesitant to exercise their extraordinary power under article 226 of the Constitution. In the present case, we find that the petitioner-company is required to pay every month an amount of Rs. 2 lacs as sales tax. The petitioner is manufacturing wagons which can be sold only to the Railway Board. No private party can come forward to purchase the product of the company as railways in our country are nationalised. The Railway Board has adopted an attitude that it would not reimburse the petitioner-company even if it is required to pay sales tax under the Act. The petitioner has been provisionally assessed for the month of May, 1968, by the assessing authority and a penalty of Rs. 1,899.29 has been imposed for not depositing the amount of tax within time. There is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls with the delivery of the wagons and mentions "that the delivery of the stock free on rail your (company's) works siding is required to be completed by 30th June, 1969". Para 4 relates to the packing of axle-boxes and, according to this para, packing of axle-boxes wherever necessary will be done by the Western Railway. No packing charges on account of the same will be received from you (company). Para 5 mentions about the inspecting authority. Under this para the Joint Director (I & L), R. D.S.O., Calcutta, or his representative was appointed as the inspecting authority for the inspection of the stock of the company. The Special Conditions contained in annexure A appended to annexure 10 prescribe various terms. Para 1 deals with the price wage escalation, price de-escalation, material escalation and production rebate. Para 2 contains a term regarding the examination of escalation claims and para 3 refers to the specifications and drawings. In para 3 it is further laid down that the basic price shall have reference to the specification shown in the order. Any modification to specifications or design shall be subject to price adjustment over and above the basic price which will be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for Government and use such materials economically and solely for the purpose of the contract against which they are issued and not dispose of them, without the permission of the Government and return, if required by the purchaser, all surplus or unserviceable materials that may be left with him after the completion of the contract or at its termination for any reason whatsoever on his being paid such price as Government may fix with due regard to the condition of the material. The freight charges for the return of the materials according to the directions of the purchaser shall be borne by the contractor, in the event of the contract being cancelled for any default on his part. The decision of Government shall be final and conclusive. In the event of a breach of the aforesaid condition, the contractor shall in addition to throwing himself open to action for contravention of terms of the licence(s) or the permit(s) and/or for criminal breach of trust be liable to account to Government for all moneys, advantages or profits resulting or which in the usual course would have resulted to him by reason of such breach." Other terms in the Special Conditions of Contract are not very ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cate. Within 14 days of receipt of this bill and certificate, the purchaser will pay the 90 per cent bill, and on payment of this bill the vehicles in question will become the property of the purchaser. (2) The balance of 10 per cent shall be treated as security for the due fulfilment of the contract and the contractor shall be entitled to receive payment of the balance of 10 per cent on vehicles as completed on his receiving a certificate from the purchaser to the effect that the actual delivery of the vehicles in question has been taken, that the delivery was made in due time, and that the contract has been duly fulfilled in every respect in so far as it relates to the completed vehicles." Then there is an arbitration clause and other clauses with which we are not concerned. Under clause 4 of the Special Conditions of Contract, it was provided that "on account" payment up to 90 per cent of the value of the steel and other raw material purchased by the company shall be made to the company on furnishing necessary indemnity bond to the paying authority. Under this condition, the petitioner executed the indemnity bond on 15th February, 1968, and this bond is annexure 11 on the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned counsel, such a contract cannot be construed as a contract for sale but it will always be taken as a contract for works or a contract for service. In support of this contention that the raw material used by the company for the manufacture of the railway wagons belonged to the railways, he drew our attention to Special Condition No. 4, which provides that advance payment equal to 90 per cent of the price of the steel and other raw material procured by the company for completing the order of the supply of wagon shall be made against such materials on the production of a certificate to that effect from the concerned officer of the Inspection and Liaison Organisation and on executing an indemnity bond in favour of the paying authority. This stipulation about the execution of an indemnity bond by the company for procuring 90 per cent "on account" payment against the raw material, therefore, makes the terms of the indemnity bond a part of the contract and whatever has been mentioned in such an indemnity bond will also have a bearing on the interpretation of the terms of the contract as a whole; and, in this connection, he referred to page 2 of the indemnity bond wherein it ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material condition which goes to transfer the ownership of the material to the Railway Board, the General Conditions cannot be resorted to ascertain as to at what stage the ownership in the wagon passes to the purchaser. It was further argued that other conditions regarding wage escalation and de-escalation of the price contained in para 1 of the Special Conditions and the clause relating to inspection and supervision are more consistent with the interpretation that the contract was a works contract and not a contract for sale. Mr. Chitaley, appearing on behalf of the company, on the other hand, argued that "on account" payment under clause 4 of the Special Conditions cannot be taken to be a payment against the price of the steel and other material procured by the company for the manufacture of wagons as we do not find in the entire contract any term which may refer to the further payment of the balance of 10 per cent price of such stock by the Railway Board. In the absence of any such stipulation, his contention is that "on account" payment should be taken as a payment towards the price of the wagons as fixed by annexure 10 and not towards the price of the material purchased by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chitaley and urged that looking as a whole to the terms and conditions of the contract, it is difficult to say that as soon as advance payment is made by the railways to the contractor under clause 4 of the Special Conditions of Contract, the property in the goods purchased by the contractor passed to the Railway Board. In the light of these contentions, we examined very carefully the terms of the contract embodied in the various documents relied upon by the learned counsel for the parties. Clause 4 of the Special Conditions provides for the advance payment to be made by the Railway Board to the company. That payment has been termed as "on account" payment. According to this condition, 90 per cent of the value of the steel and other raw material procured by the firm for executing the order under this contract is to be made against such material on the production of a certificate to that effect from the concerned officer of the Inspection and Liaison Organisation and on furnishing necessary indemnity bond to the paying authority. In a note under sub- clause (a) of clause 4 of the Special Conditions, it has been mentioned that "'on account' payment will be permissible only on stee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... railways as soon as "on account" payment Is made to the company. Mr. Narsa Raju could not, however, point out as to when the ownership in the material against which no advance payment is received by the company under this clause and used by it in the construction of the wagons shall pass to the railways. We do not feel that "on account" payment to the company under this clause provides any foundation for the Union of India to advance this argument. There is no doubt that while executing the indemnity bond the petitioner at page 2 of the bond has mentioned that the contractor, meaning thereby the petitioner-company, shall hold at his works at Bharatpur and/ or at the works of his sub-contractors the stores and articles of the railways in respect of which advance may be made to him against the said order. The words "of the railways" in this clause no doubt provide a convenient handle to the learned counsel for the Railway Board to advance an argument that the material and the stores against which advance payment has been made becomes the property of the railways as described in the bond but this language of the indemnity bond taken into consideration out of context is not sufficien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty of the railways even though the company has paid for it. This condition in the indemnity bond refers to only that material which was left unused after the completion of the contract and which has to be returned to the railways on the payment of price. In this background, if the company inadvertently described the stores and the articles as that of the railways, it would not necessarily lead to an inference that the property in the material procured under clause 5 against which "on account " payment has been made would become the property of the railways as soon as the material is procured or "on account" payment is made by the railways. Apart from this, we find in a very clear language a condition in the Standard Conditions of Contract which deals with the system of payment whereunder the property in the wagons passes to the railways. Para 15 of these conditions clearly stipulates that when one or more vehicles have been completed the contractor (petitioner-company) on receipt of a certificate signed by the Inspecting Officer shall submit to the purchaser (Railway Board) "on account" bill for 90 per cent of the value of the vehicles and within 14 days of the receipt of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arisen when this term was agreed upon by the parties. The existence of this term in the Special Conditions throws light about the mind of the contracting parties as to how they treated the "on account" payment. The next contention of Mr. Narsa Raju is that under clause 5 of the Special Conditions of Contract the contractor (the company) is required to hold the material procured by it with the assistance of the Government either by issue from the Government stock or purchase under arrangements made or permits or licences issued by the Government as trustee. This condition, according to Mr. Raju, clearly indicates that the property in the stocks procured under clause 5 of the Special Conditions belonged to the railways and the company was simply a trustee to hold it for the railways. In our view, this condition is not of much assistance for interpreting the contract because in this very clause it has been agreed between the parties that all surplus or unserviceable material that may be left with the company after the completion of the contract, or at its termination for any reason whatsoever, on his being paid such price as the Government may fix with due regard with the condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h bodies, the unfinished bodies in the process of erection were treated under the terms of the contract as the property of the railways. In these circumstances, their Lordships of the Supreme Court held that as the terms of the contract indicated that the respondent was not to be the owner of the ready coaches and that the property in those bodies vested in the railways even during the process of construction, the transaction was clearly a works contract and did not involve any sale. The terms of the present contract, in our opinion, are entirely different. As it is clear from para 15 of the Standard Conditions of Contract, that within 14 days of the receipt of the bill submitted by the contractor after the certificate was obtained from the Inspecting Officer to the effect that one or more vehicles have been completed, the purchaser (railways) will pay the 90 per cent bill and on payment of that bill the vehicles in question will become the property of the purchaser. This condition, which clearly stipulates about the stage at which the ownership in the completed wagons was to vest in the railways, and which is not modified or superseded by any of the terms of the Special Conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernor till their delivery to the Governor, and that the appellants had to construct the bus bodies in strict accordance with the specifications on those chassis and deliver the bodies to the Governor on or before the dates specified in the agreement. There was also a condition for the payment of liquidated damages If the appellants failed to deliver the bodies In a specified time, and also a clause for inspection by the Controller or officers authorised by the Government to supervise the construction of the bodies was entered therein. After examining certain cases cited before their Lordships of the Supreme Court, their Lordships by their majority judgment held that the contract must be looked Into as a whole to find out the real intention of the parties and that the clauses relating to time schedule and inspection or liquidated damages, which, according to the learned counsel for the State of Orissa, were inconsistent with an agreement for the sale of goods were examined and it was held that a contract for sale of goods does not cease to be a contract for sale merely because the process of manufacture was supervised by the purchaser, or that the time schedule clause was provided i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised before us. At least one thing is apparent that no such term of that contract has been referred by their Lordships of the Mysore High Court in their judgment as is incorporated in clause 15 of the General Conditions and, therefore, we can safely presume that no such condition was present in the contract. The absence of such a condition of the contract is likely to change the complexion of the contract. In these circumstances, we feel that the Mysore case Sales Tax Appeal No. 8 of 1966 decided on 1st March, 1967 (Mysore High Court); Affirmed by the Supreme Court in [1972] 29 S.T.C. 438 (S.C.)., can hardly provide any foundation for the railways to build its argument on that basis. For the reasons discussed above, we allow the writ application and hold that the contract in this case is a contract for sale of wagons by the petitioner-company to respondent No. 2, Union of India, through the Railway Board and as such the Railway Board is not justified in denying its liability to reimburse the petitioner-company for the sales tax which the company is required to pay on the sales of wagons under the contract. In the circumstances of the case, we pass no order as to costs. The Uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of the transaction was that of a works contract and not a sale or purchase and, therefore, the Railway Board was not liable to reimburse the company for the amount of sales tax, if any, paid by the company to the State of Rajasthan. While in reply to the Railway Board, the company contended that the contract was for sale of wagons and not a contract for works, it took a contrary position in its representation to the Commissioner of Sales Tax, Rajasthan. Instead of giving any relief, the sales tax department informed the company that it should stop purchasing materials on the strength of form C under the Central Sales Tax Act. Such stoppage would have saddled the company with a further liability to pay tax at the enhanced rate on the purchase of materials used for the manufacture of wagons. The Commercial Taxes Officer provisionally assessed the company under section 7D of the Rajasthan Sales Tax Act on the sale of wagons to the Railway Board for the month of May, 1968, and served a demand notice for payment of Rs. 1,91,827.79 including Rs. 1,899.29 as penalty. Since the company was registered as a dealer under the Sales Tax Act, it had to bear, in the first instance, the charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Union of India and allowed the writ petition. Hence this appeal by the Union of India. The question, whether a contract is one for sale of goods or for executing works or rendering services, is largely one of fact, depending upon the terms of the contract, including the nature of the obligations to be discharged thereunder and the surrounding circumstances. It is, therefore, necessary to examine the terms and conditions of the contract in question. There is no consolidated contract deed formally executed by the parties, on record. There are, however, several documents, including the correspondence between the parties, which embody the terms and conditions of the contract. By its letter No. 67/RS(I)/954/15 dated December 23, 1967, and letter dated June 15, 1968, the Railway Board communicated to the company, the former's acceptance of the offer made by the company in its earlier letters, including the letter dated December 12, 1967, to manufacture and supply, B. G. Bogie covered wagons, BCX type and M. G. covered wagons MBC type. The number of wagons to be supplied and the price per wagon of each type were indicated in these letters. Paragraph 2 of the letter dated December ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... balance of 10 per cent on vehicles as completed on his receiving a certificate from the purchaser to the effect that the actual delivery of the vehicles in question has been taken, that the delivery was made in due time and that the contract has been duly fulfilled in every respect in so far as it relates to the completed vehicles." Condition 16 lays down that if the "defect arises from inferiority of material or workmanship, or from imperfect protection or other default on the contractor's part ", the Railways shall be at liberty to ask the contractor to remedy the defect and deduct from any money due to the contractor. The Special Conditions of Contract contained in annexure A to the letter dated December 23, 1967, are as under: "SPECIAL CONDITIONS 1.3. Material escalations.-Adjustments due to variations in the cost of material will be confined to the variations in the prices of steel at Col. 1 rate through Governmental action for controlled categories and those fixed by J.P.C. for decontrolled categories of steel. The escalation would be allowed in respect of such of the quantities of the material which were purchased and paid for the manufacture of wagons on order after the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consignee-Railways that wagons have been received in complete condition and in good working order, provided that the payments so made shall be provisional and subject to adjustment and finalisation by deduction of rebate in accordance with provision of clause 1A." (underlining ours.) The other material Special Conditions are: "5. Use of raw materials secured with the Government assistance.- Where any raw materials for the execution of the contract are procured with the assistance of Government either by issue from Government stock or purchase under arrangements made or permit(s) or licence(s) issued by Government, the contractor shall hold the said materials as trustee for Government and use such materials economically and solely for the purpose of the contract against which they are issued and not dispose of them, without the permission of the Government and return, if required by the purchaser, all surplus or unserviceable materials that may be left with him after the completion of the contract or at its termination for any reason whatsoever, on his being paid such price as Government may fix with due regard to the condition of the materials. The freight charges for the return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ossession or in the possession of his sub-contractors or if any refund becomes due to the Railways without prejudice to any other remedies available, the Railways may also deduct such amount from any sums due, or any sum which at any time hereinafter may become due to the contractor.........." Clause (o) of section 2 of the Rajasthan Sales Tax Act, 1954, defines sale". It says: "'Sale', with all its grammatical variations and cognate expressions, means any transfer of property in goods for cash or for deferred payment or for any other valuable consideration, and includes a transfer of goods on the hire-purchase or other system of payment by instalments..." Thus, transfer of property in goods for a price is the linchpin of the definition. Under section 4 of the Sale of Goods Act, 1930, also, in the definition of the term "sale" stress is laid on the element of transfer of property in the goods. According to the Roman jurists, also, the purport of a contract of sale is that the seller divests himself of all proprietary right in the thing sold in favour of the buyer. It is this requisite which often distinguishes a contract of sale of goods from a contract for work and services. E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove criteria to the contract in question. The contract is expressly one for the manufacture and supply of wagons for a price. Price has been fixed taking the wagon as a unit. Payment of the price is made for each vehicle on its completion and delivery by the contractor to the purchaser, who is described as the Union of India acting through the Railway Board. Such payment is made in two instalments, viz., 90 per cent of the value of the vehicle on completion against an "on account" bill, together with the completion certificate from the Inspecting Officer appointed by the Railway Board, and the balance of 10 per cent after delivery. If clause (1) of Standard Condition 15 is not inconsistent with anything in the Special Conditions-and as we shall presently notice it is not so-it clinches the issue inasmuch as it declares in unequivocal terms the intention of the contracting parties that on payment of the 90 per cent of the value, the vehicles in question will become the property of the purchaser". Prima facie, the contract in question has all the essential attributes of a contract of sale of movables. That is to say, here is an agreement to sell finished goods manufactured by the sel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on its clause: "That the contractor shall hold at his works at Bharatpur and/or at the works of his sub-contractors the stores and articles of the Railways in respect which advance may be made to him against the said order." From a conjoint reading of Special Conditions 4, 5, 7 and the indemnity bond it is sought to be spelt out that all the raw materials and components used in the manufacture of the wagons, belonged to the Railway Board; such materials were either procured under Special Condition 4 against 90 per cent "on account" payment which should be taken as a payment towards the price of the material purchased and held by the company on behalf of the Railway Board, or procured under Special Condition 6 free of cost. It is maintained that since purchases of raw material against 90 per cent "on account" payment were made by the company on behalf of and/or the Railway Board, that was why in the indemnity bond, the "stores and articles" in respect of which the advance has been made by the Railway Board, are described as "of the railways". It is further submitted that in view of the facility available to the contractor, there was little or no possibility of any materials other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the use and disposal of those materials on the company who had become owner thereof by purchase for a price. In refutation of the stand taken by the appellant, it is asserted that under the terms and conditions of the contract, it is not obligatory for the company to purchase all the materials required for the construction of the wagons from the Government stores or with the assistance of the Government against 90 per cent advance payment. It is submitted that in accord with the terms of the contract, lot of raw material against which no such advance was taken, was purchased by the company and used in the construction of the wagons. With our permission, an affidavit has been filed before us on behalf of the company to support this assertion of fact. Dr. Singhvi has further submitted that the terms of the contract in question are materially different from those which were in question in Hindustan Aeronautics case [1972] 29 S.T.C. 418 (S.C.); [1972] 2 S.C.R. 927., and in Variety Body Builders [1976] 38 S.T.C. 176 (S.C.); A.I.R. 1976 S.C. 2108., and consequently those decisions cannot govern the instant case. According to the counsel, the instant case is more in line with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd not merely the form which has to be looked into. The real intention of the contracting parties is primarily to be sought within the four corners of the documents containing the Standard and Special Conditions of Contract. If such intention is clearly discernible from these documents, it will not be proper to seek external aid from the stereotyped indemnity bond which is not only collateral but also posterior in point of time to the contract. It will bear repetition that there is no conflict or inconsistency between Standard Condition 15 and the Special Conditions. The terms and conditions of the contract, read as a whole, indubitably lead to the conclusion that the property in the materials procured or purchased by the company, against the 90 per cent value of which advance is taken from the railways, does not, before their use in the construction of the wagons, pass to the railways. Reasons for arriving at this conclusion are as under: (i) Clause (a) of Special Condition 4 which provides for "on account" payment up to 90 per cent of the value of steel and other raw materials procured by the firm (company) is to be read with clause (b) which makes it clear that such "on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly pointed out by the High Court the word "of" in the expression "of the railways" used in the indemnity bond in the context of "stores and articles" appears to have been loosely used. Moreover these "stores and articles" might include the wheelsets and articles supplied by the railways free of charge from its stores under Special Condition 6. The expression "of the railways" might have been possibly used in the context of such components belonging to the railways. Furthermore under condition 5, in respect of all surplus material, the railways had been given a right of pre-emption. Even so, much capital cannot be made out of the use of this loose expression in the indemnity bond, when the conditions embodied in the contract documents, read as a whole, clearly show that the property in the materials purchased by the company with the assistance of the railways/Government does not pass to the railways. The upshot of the above discussion is that with the exception of wheelsets (with axle-boxes and couplers), substantially all the raw materials required for the construction of the wagons before their use belong to the company and not to the President/Railway Board. In other words, with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the contract then under consideration and the report of the Commercial Tax Officer, these facts appear to be well-established: (i) The material used in the construction of coaches before its use was the property of the railways. (ii) There was no possibility of any other material being used excepting which belonged to the President/railways before its use in the construction. This fact was borne out from the report of the Commercial Tax Officer. (iii) Further in the contract in question in that case, there was no term corresponding to clause (1) of Standard Condition 15. This Court therefore found that the difference between the price of a coach and the cost of material could only be the cost of services rendered by the assessee. Such is not the case here. The bulk of the material used in the construction of the wagons, as already discussed above, in the instant case, belongs to the company before its use. State of Gujarat (Commissioner of Sales Tax, Ahmedabad) v. Variety Body Builders [1976] 38 S.T.C. 176 (S.C.); A.I.R. 1976 S.C. 2108., cited by Shri Mehta, also is clearly distinguishable from the facts of the instant case. There, the bulk of the materials used in the con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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