Manufacture and supply of completed motor bodies on supplied chassis treated as a taxable sale, not a mere works contract.

A contract to fit and build motor bodies on customer-supplied chassis was treated as a sale where the dealer manufactured completed movable goods, charged for the finished bodies, and transferred them to the chassis owners. The decisive factor was that the finished article itself formed the subject of the bargain, so the element of sale predominated over work and labour. On that basis, the transaction was taxable as a sale under the sales tax law, and the body-building arrangement was not treated as a mere works contract. The same reasoning also indicated that labour charges were not separately deductible on the stated facts.

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Issues: Whether the contract for fitting and building bodies on chassis supplied by customers constituted a sale within the meaning of the sales tax law, and whether the assessee was entitled to deduction of labour charges.

Issue (i): Whether the contract for fitting and building bodies on chassis supplied by customers constituted a sale within the meaning of the sales tax law.

Analysis: The decisive question was the true nature of the bargain. The authorities found that the assessee built complete bodies, charged for them as finished articles, and transferred those bodies to the owners of the chassis. The agreement was not merely to do work on another's property, but to manufacture and supply completed motor bodies for consideration. The reasoning in building-contract cases did not govern, because the subject-matter here was movable goods capable of sale, and the finished body itself was the very thing contracted for and delivered. On the facts, the element of sale predominated over the element of work and labour.

Conclusion: The transaction was a sale within the meaning of the Act and was taxable.

Final Conclusion: The reference was answered against the assessee, and the bodies fitted on the chassis were held liable to sales tax as sales of goods.

Ratio Decidendi: Where a dealer undertakes to manufacture and supply completed movable goods for a lump sum, and the finished article itself is the subject of the bargain and passes to the customer, the transaction is a contract of sale and not a mere works contract.

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