TMI Blog2004 (9) TMI 627X X X X Extracts X X X X X X X X Extracts X X X X ..... goods and erection and installation thereof. The petitioner assigned that contract regarding erection and installation only of boilers to the pro forma respondent Babcock Wilcox of India Ltd. Both the contracts were divisible one for supply of goods and another for erection and installation where no transfer of property in the goods was involved. The subcontractor, namely, the proforma respondent as such is liable to pay tax under section 6D in respect of transfer of property in the goods, if any, involved in the execution of that agreement or contract. The sub-contractor has been assessed to tax in respect of such work and the amount paid by the petitioner to the sub-contractor was only for the services rendered and not for transfer of sale of goods in execution of works contract. The petitioner availed of the labour, skill and services of the sub-contractor regarding installation and erection and paid for such services, not for any sale of goods. In this case both the dealers the petitioner and the pro forma respondent have been made liable to pay tax in respect of the same transfer which is not lawful. As actual execution of the contract was done by the sub-contractor who has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed to tax or not. The rate of tax at 4 per cent has been rightly charged though in the assessment, the section has been wrongly stated as pointed by the petitioner. So, the assessment order and the order of confirmation of the same both in appeal and revision cannot but be upheld. The petitioner used affidavit-in-reply. Besides reiterating the facts and points noted in the main application, it is stated that the contract filed would show engagement of sub-contractor was for rendering services since petitioner had no expertise in the installation or erection of boilers. The petitioner also finds some motive for using the word etc. in the assessment order. The petitioner wants to say that the word etc. has been used to avoid the word installation . It is further contended that if the several principal contracts between the petitioner and the other parties and six corresponding sub-contracts for installation between the petitioner and the sub-contractor could have been examined by the respondent No. 1 he could have found these to be divisible. The invoice relied upon by the respondent throws no light on the nature of the contract. Respondent No. 1's conclusion regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut contract being essentially for work, there is no separate contract for sale of material. This type of contract attracts sales tax as indivisible works contract on contractual transfer price related to that works contract. Where contract of work is to be done for remuneration and there is involvement of supply of materials to be used for a price and execution of work by labour for a price the first part involving sale of goods is taxable even though it is a composite contract which is divisible. Besides the above position of law prevalent at the time which is to be applied in determining the question before us, we are also to note that subsection (3A) to section 6D of the Bengal Finance (Sales Tax) Act of 1941 was not in the statute book at the relevant period of time to be considered by us. We are to consider an assessment order for the four quarters ending March 31, 1985 whereas sub-section (3A) was incorporated by way of amendment in 1994 with effect from April 11, 1994. Sub-section (3A) made clear provision that when a sub-contractor is engaged by the contractordealer for execution of a works contract and the sub-contractor pays tax under this section and the main c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nately despite the chances being given the petitioner failed to produce such documents to prove the alleged expenses on those two heads in respect of work of erection and commissioning of boiler unit at the respective payee's premises. It also appears that the authorities below made no discussion over the terms and conditions of the respective offers made by the payee contractees and their acceptance by the petitioner in respect of those. The main contractual offers came from Bandel Power Station, Durgapur Project Ltd., Power Station, Durgapur Unit of HFCL, Kolaghat Thermal Station under the West Bengal State Electricity Board and Sahaganj Factory, Dunlop. Those original papers inviting the petitioner to get the work done through the petitioner is not here. We do not know as to the actual terms of that original contract. Transfer of property in goods for a price is the linchpin of the definition of sale . Whether a particular contract is one for sale of goods or for work and labour depends upon the main object of the parties found out from an overview of the terms of the contract, the circumstances of the transaction and custom of the trade. If bulk of the material used in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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