Composite works contract for steel windows treated as indivisible, so no taxable sale arose after installation.

A composite agreement to fabricate, supply, transport and fix steel windows in a building for an all-inclusive price was treated as an indivisible works contract, not a separate contract of sale. Because the windows were not sold as movable goods and property passed only after their incorporation into the building, the arrangement could not be split into labour and sale elements for sales tax purposes. On that basis, the contract was held not liable to sales tax under the Rajasthan Sales Tax Act, 1954, and the assessee succeeded.

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Issues: Whether the contract for providing and fixing steel windows was an indivisible contract of work or a divisible contract involving a sale of windows taxable under the Rajasthan Sales Tax Act, 1954.

Analysis: The contract was described and performed as a works contract for providing and fixing steel windows in a building, with specifications, fabrication, transport, and fixation all forming part of one composite arrangement. The price was an all-inclusive lump sum, with no separate agreement for sale of the windows as movable goods. The property in the fabricated windows passed only after they were fixed into the building and had become part of immovable property. On the principles governing sale of goods and composite contracts, such an arrangement could not be split into separate sale and labour components for sales tax purposes.

Conclusion: The contract was an indivisible contract of work and not a contract of sale. It was not liable to sales tax, and the answer was in favour of the assessee.

Ratio Decidendi: A composite contract for fabrication, supply, transport, and fixing of goods into a building for an all-inclusive price is an indivisible works contract, and where property passes only upon incorporation into immovable property, it does not amount to a taxable sale of goods.

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