9911796707
TMI Blog1977 (5) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... ll govern them both. 2.. The relevant facts are these: (a) The dealer, the General Electric Company of India (P.) Limited (hereinafter called "the dealer"), carried on the business of manufacture, sale and also of installation of electrical goods and equipments through its expert technicians employed by it. During the relevant period in pursuance of agreements with the Indian Explosives Limited, it supplied and installed for monetary consideration electrical goods and/or equipments in the buildings at Gomia belonging to the Indian Explosives Limited. On the basis of a report dated 24th December, 1959, the Superintendent, Commercial Taxes, Hazaribagh Circle, initiated proceedings under section 13(5) of the Bihar Sales Tax Act, 1947, for the period 1st April, 1956, to 30th June, 1959, and under section 16(5) of the Bihar Sales Tax Act, 1959, for the period 1st July, 1959, to the date of hearing. After giving the dealer an opportunity of being heard and rejecting certain contentions on behalf of the company, which were abandoned at the appellate stage and therefore, need not be mentioned, the learned Superintendent held that the dealer had sold electrical goods to the Indian Explosi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contracts was not enough, and, after pointing out that only three contracts were produced before him also, remanded the case to the assessing officer for fresh assessment after giving the dealer an opportunity of producing all contracts, tenders, bills there of and the learned Deputy Commissioner also recorded his finding and comments relating to the three contracts produced before him and directed that "his findings and comments relating to those contracts should be followed in deciding the taxability of transaction covered by other contracts". As regards contract No. 1117, he held that the property in the goods supplied in pursuance of this contract passed only at the stage when the goods had become immovable and, therefore, the transaction was not exigible to sales tax. As regards contract No. 3066, while noting that the tender showed that the company offered to supply, deliver and instal the articles mentioned in the tender, pointed out that item No. 4 thereof containing quotations for "lighting installations" quoted some prices for accessories and held that it was "not clear from the contract whether those accessories when the installations were completed become permanent fix ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be sale and hence taxable under the Bihar Sales Tax Acts." and, thereafter, passed the following order: "33. The result is that the assessments are set aside and remanded to the lower court for fresh assessment after- (i) examination of all the papers and documents relating to all the 122 contracts, and (ii) after ascertaining the taxability of certain articles which remain movable on transfer of property in these goods, on a local inspection, on the basis of the tests discussed above." (c) After moving the Commissioner, Commercial Taxes, Bihar, unsuccessfully, the dealer filed applications in revision before the Commercial Taxes Tribunal, which were numbered as Revision Cases Nos. 171 and 172 of 1966. In those revision cases, the correctness of the order remanding the cases to the assessing officer for fresh assessment was not challenged, but the directions contained in paragraph 32(ii)(c) of the order of remand and also the direction given in paragraph 33(ii) were impugned as incorrect. The Tribunal disposed of both the revision cases by a common order dated 11th November, 1967. Regarding the direction given in paragraph 32(ii)(c), the Tribunal held as follows: "We are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nspection to find out whether the articles remain still movables even after transfer of property in the goods, is not a direction applicable to all cases. I have already pointed out that as regards one speciman, namely, contract No. 1117, on examination of the terms of the contract itself, the learned Deputy Commissioner arrived at the finding that property in the goods supplied passed only at the stage when the goods had become immovable and, therefore, the transaction was not exigible to sales tax. Obviously, the learned Deputy Commissioner did not direct any inspection in respect of articles, goods or materials supplied in pursuance of contract No. 1117 and similar contracts. He directed an enquiry in respect of contracts Nos. 3066 and 1225/ABM/BS and contracts similar to them on the finding that "it was not clear from the contract whether those accessories when the installations were completed, became permanent fixtures". It was not clear from the contract whether those accessories when the installations were completed, State of Madras v. Gannon Dunkerley & Co. (Madras) Ltd. became permanent fixtures, is another mode of expressing that it was not clear from the contract whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erms of the contract, the question referred must be answered in the negative. If, however, it has some bearing, howsoever slight, in determination of the terms of the contract, the question must be answered in the affirmative. 5.. I am unable to hold that the fact whether or not the goods supplied continue to be movables even on transfer of property in those goods is entirely irrelevant to the determination of the terms of the contract in the facts and circumstances of the case. The transaction would be exigible to sales tax only if it was either in essence and substance a contract for sale of goods and not a works contract, or if the transaction was a composite contract containing two distinct and separate agreements, one for sale of goods for monetary consideration and the other for remuneration for service and work done, in which case it will be open to the authorities to impose sales tax on that part of it which is a contract for sale of goods. In State of Madras v. Gannon Dunkerley & Co.[1958] 9 S.T.C. 353 at 386 (S.C.)., which is a leading decision on the subject of works contract, to use the words of Shah, J., as he then was, in the case of John Mowlem & Co.[1967] 19 S.T.C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t must be held that the property in the goods passed as movables. In the face of these decisions, it is idle to contend that the fact whether the goods supplied continued to be movables even after the execution of the contract is irrelevant for determination of the question whether the transaction was a contract for sale of goods or a contract for service and work. 6.. Sri Chatterjee, the learned Advocate appearing for the dealer, drew our attention to the decision of the Supreme Court in Carl Still's case(5), for the proposition that even when the property in the goods passed as movables, the contract for supply of those goods may still be a works contract and not a composite works contract and a contract for sale of goods. That would only show that the fact that the property in the goods passed as movables is not decisive; it does not show that the said fact is irrelevant. Sri Chatterjee also referred to the decision of this court reported in Commissioner of Commercial Taxes v. Indian Cable Co. Ltd.(1) But that case does not support the contention that the question whether the goods continued to be movables after the execution of the contract is immaterial to the determination o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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