Electrical energy as goods and steam supply as work-and-labour arrangement shaped the sales tax treatment.

Electrical energy can fall within the statutory meaning of "goods" where the definition extends to movable property, because electricity is capable of abstraction, transmission, transfer, delivery, storage and consumption; the Electricity Board, carrying on the business of generation, supply and distribution, is therefore a "dealer" for sales tax purposes. On the steam transaction, the true character of the arrangement was determined from its surrounding circumstances: steam was supplied on a cost-linked reimbursement basis, with no real contract for sale as such, so the transaction was not a taxable sale of goods but an arrangement in the nature of work and labour.

---

---

Issues: (i) Whether electrical energy is "goods" and the Electricity Board is a "dealer" in respect of its activity of generation, distribution, sale and supply of electrical energy; (ii) whether the supply of steam to Nepa Mills was a sale of goods liable to sales tax or an arrangement in the nature of work and labour.

Issue (i): Whether electrical energy is "goods" and the Electricity Board is a "dealer" in respect of its activity of generation, distribution, sale and supply of electrical energy.

Analysis: The statutory definition of "goods" was wide enough to include all kinds of movable property, and electricity, though intangible, was capable of abstraction, transmission, transfer, delivery, storage and consumption. Its treatment in sales tax law did not depend on physical tangibility. Since the Board carried on the business of selling, supplying and distributing electric energy, its activity fell within the statutory meaning of "dealer".

Conclusion: The answer is in favour of the Revenue. Electrical energy is goods for the purposes of the two Acts, and the Electricity Board is a dealer in respect of its activities relating to electrical energy.

Issue (ii): Whether the supply of steam to Nepa Mills was a sale of goods liable to sales tax or an arrangement in the nature of work and labour.

Analysis: On the facts found, the arrangement was that water was supplied free by the mills and steam was supplied by the Board on a basis linked to actual cost and reimbursement of loss, without a real contract for sale of steam as such. The true nature of the transaction had to be gathered from the attendant circumstances, and the main object was not transfer of steam as a chattel but performance of the conversion activity for actual cost.

Conclusion: The answer is in favour of the assessee. The supply of steam was not a taxable sale of goods but was in the nature of work and labour.

Final Conclusion: The appeals succeeded only in part, with the holding on electricity reversed in favour of the Revenue and the holding on steam maintained in favour of the assessee.

Ratio Decidendi: For sales tax purposes, electricity may constitute goods if the statutory definition extends to movable property, and a transaction is not a sale where its true character is a works or labour arrangement rather than transfer of goods as such.

---