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TMI Blog1970 (3) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... them and their customer and that therefore there was no element of sale involved in the transaction. The revenue negatived the exemption claimed. But, on second appeal, the Sales Tax Appellate Tribunal came to the conclusion that no element of sale was involved and the exemption claimed was sustainable. It is as against this that the State has preferred the present tax case. The dealings in so far as the assessable turnover in question is concerned, can be summarised thus: The respondents were contractors of repute and were technically qualified as Engineers to fabricate and install a humidifying plant and other accessories with air-ducts, embedded into the building of their customer. In effect, they were qualified to install the plant alo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the materials which were the subject-matter of the assessable turnover in question passed only after the erection work was over and not before. Ultimately the Tribunal was of the view that the contracts were indivisible composite contracts of work and labour for supply and installation of the humidifying plant and therefore the turnover was not assessable to tax. The learned Assistant Government Pleader arguing for the State, who are the appellants in the case, contends that the nature of the work undertaken by the assessee cannot be said to be, as described by the Tribunal. He would state that predominantly an element of sale is involved in the contracts in question and such element is divisible from the totality of the dealings between th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, purlins, bracing, side claddings, supports etc. Nevertheless an all-inclusive price as in the instant case was charged by the respondents in that case for the totality of the work of fabrication. The court came to the conclusion that the contracts were to be deemed and characterised as works contracts. In General Electric Company v. Government of Madras[1968] 21 S.T.C. 283. decided by this court to which one of us was a party, our High Court reiterated the broad principle thus: "In cases, where the contract consists of the fabrication and erection of steel structures or buildings on the site of the customer, the main test is to find out whether the customer ever bargained for the sale and purchase of the component parts used in the wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent was to prepare the window-leaves according to the specifications and to fix them to the building. There were not two contracts-one of sale and another of service. 'Fixing' the windows to the building was also not incidental or subsidiary to the sale, but was an essential term of the contract. The window-leaves did not pass to the Union of India under the terms of the contract as window-leaves. Only on the fixing of the windows as stipulated, the contract could be fully executed and the property in the windows passed on the completion of the work and not before." Under those circumstances, the contract was held to be one for execution of work not involving sale of goods. The case under consideration is one to which the princip ..... X X X X Extracts X X X X X X X X Extracts X X X X
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