Repair labour charges are not sales tax turnover, while spare parts supplied during repairs remain taxable.

Labour charges for repairing, oiling and cleaning watches, clocks and timepieces were not taxable because they did not amount to a sale of goods under the Bengal Finance (Sales Tax) Act, 1941. The court held that the statutory definition of contract could not be extended beyond the items expressly covered in the Act, so service components were excluded from taxable turnover. Spare parts such as mainsprings, wheels and escapements supplied during repairs were treated as goods sold in the course of business and their value was taxable. The assessment was directed to be revised accordingly.

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Issues: Whether charges for repairing, oiling and cleaning of watches, clocks and timepieces were includible in the taxable turnover, and whether the sale value of spare parts supplied in the course of repairs could be taxed.

Analysis: The order treated the earlier Board decisions as binding and held that the definition of contract under section 2(b)(i), (ii) and (iii) of the Bengal Finance (Sales Tax) Act, 1941 could not be extended beyond the items expressly stated in the Act. On that basis, the labour charges for repairing, oiling and cleaning were not liable to sales tax because they did not amount to a sale of goods. At the same time, the order distinguished spare parts such as mainsprings, wheels and escapements supplied by the dealer during repairs. Those items were treated as goods of assessable value sold in the course of business and therefore taxable.

Conclusion: The repair, oiling and cleaning charges were held not taxable, while the value of separately supplied spare parts was held taxable. The assessment was therefore directed to be revised accordingly in favour of the assessee in part.

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