Fabrication of steel to customer specifications treated as sale of goods, not a works contract, on the contract documents and transfer of property.

Fabrication of steel to customer specifications was held to be a sale of goods, not a works contract, because the transaction documents showed an undertaking to supply finished fabricated goods at a quoted price with no separate charge for labour or work. The evidence did not show property in the goods passing to the customers before fabrication was completed and delivery effected. A transaction resulting in transfer of property in finished goods to a third party is a sale, and the fabrication contracts therefore fell outside the works contract definition under the General Sales Tax Act, 1125.

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Issues: Whether the fabrication of steel to customer specifications constituted a works contract or a sale of goods under section 2(1) of the General Sales Tax Act, 1125.

Analysis: The definition of works contract covered agreements for construction, fitting out, improvement, or repair of movable property. The transaction documents showed an undertaking to supply fabricated steel goods at a quoted price, with no separate charge for labour and work. The evidence did not show any property in the goods vesting in the customers before fabrication was completed and delivery effected. A transaction that results in transfer of property in finished goods to a third party is a sale and not a works contract.

Conclusion: The fabrication contracts were contracts for sale of goods and not works contracts.

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