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Issues: (i) whether the writ petition should be entertained when an appeal and revision under the Sales Tax Act were available and an appeal was already pending; (ii) whether the earlier view that sales tax could be levied on the value of hessian cloth and iron hoops used in packing pressed cotton was inconsistent with the principles stated by the Supreme Court in the cases on works contracts and sale of goods.
Issue (i): whether the writ petition should be entertained when an appeal and revision under the Sales Tax Act were available and an appeal was already pending.
Analysis: The existence of an effective statutory appellate and revisional remedy was a substantial objection to the exercise of writ jurisdiction. Since the assessment order was already under appeal, the matter could be examined by the appellate authority, including the question whether the case should be sent back for factual inquiry on the alleged agreement for sale of packing material. The availability of that remedy made intervention under Article 226 inappropriate.
Conclusion: The writ petition was not maintainable on this ground.
Issue (ii): whether the earlier view that sales tax could be levied on the value of hessian cloth and iron hoops used in packing pressed cotton was inconsistent with the principles stated by the Supreme Court in the cases on works contracts and sale of goods.
Analysis: The Supreme Court authorities drew a distinction between a single and indivisible works contract and a contract that contains a separable agreement to sell materials as materials. The earlier decision dealing with pressing cotton was confined to extraneous packing material that did not pass by accretion and whose property was transferred for consideration under an implied agreement of sale. The later Supreme Court rulings did not prohibit tax on the sale component where the contract, on its true construction, involved a distinct sale of packing material.
Conclusion: The earlier decision remained good law and was not displaced by the Supreme Court rulings.
Final Conclusion: The Court declined writ relief, leaving the assessment issues to be examined in the pending statutory appeal, while affirming that the levy on packing material could still be examined as a separable sale component.
Ratio Decidendi: Where a transaction for work also contains a separable agreement, express or implied, for the transfer of packing material for consideration, sales tax may be levied on that sale component notwithstanding that the principal service element is a works or labour contract; the existence of an adequate statutory remedy may also justify refusal of writ relief.
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