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of <h1>Key Rulings on Contract Type, Tax Objection, and Costs Allocation in Recent Case</h1> The Court dismissed the preliminary objection regarding exhaustion of alternative remedies, citing exceptions where illegal tax or infringement of ... - Issues Involved:1. Legality of the sales tax assessment order.2. Availability and exhaustion of alternative remedies.3. Nature of the contract (whether it was a works contract or a contract for the sale of goods).Detailed Analysis:1. Legality of the Sales Tax Assessment Order:The petitioner, an approved contractor, challenged the assessment order dated 24th August 1961, made by the Sales Tax Officer, Jodhpur, under Article 226 of the Constitution. The petitioner argued that the contract for supplying and fixing wooden windows and doors, along with frames, was a single and indivisible works contract and not a sale of goods. The Sales Tax Officer, however, treated the contract as a sale of movable goods and assessed the petitioner to a total tax of Rs. 6,314.07 on a turnover of Rs. 1,97,212.2. Availability and Exhaustion of Alternative Remedies:The respondents contended that the petitioner had alternative remedies under the Rajasthan Sales Tax Act, 1954, which he failed to exhaust. They argued that the High Court should not entertain the writ application due to the availability of appeals and revisions under sections 13, 14, and 15 of the Act. The petitioner countered that the tax levied was illegal and violated Article 265 and Article 19(1)(f) of the Constitution, making the case fit for the High Court's extraordinary jurisdiction under Article 226.3. Nature of the Contract:The core issue was whether the contract for supplying and fixing wooden doors and windows was a works contract or a contract for the sale of goods. The petitioner provided evidence, including the tender document and certificates from the Executive Engineer, indicating that the contract was for 'joinery and painting work' and involved 'supplying and fixing' the materials at the site. The Sales Tax Officer, however, concluded that the materials were movable and taxable.Judgment:Preliminary Objection:The Court dismissed the preliminary objection regarding the exhaustion of alternative remedies. It held that while generally, the High Court would not interfere under Article 226 until all remedies under the Act were exhausted, there were well-recognized exceptions. These included cases where the tax levied was illegal or where the fundamental rights of the petitioner were infringed. The Court cited several precedents, including Thakur Ranjeet Singh v. The State of Rajasthan and M/s. Karam Chand Thappar v. Sales Tax Officer, to support this view.Merits of the Case:The Court examined the nature of the contract and concluded that it was a single and indivisible works contract. The materials were to be supplied and fixed at the site, and the property in the goods did not pass until they were fixed, making them part of the immovable property. The Court relied on the principles laid down in State of Madras v. Gannon Dunkerley & Co. and Man Industrial Corporation Ltd. v. The State, which held that such contracts were not liable to sales tax as they did not involve the sale of goods.Conclusion:The Court allowed the writ application and quashed the assessment order dated 24th August 1961, in part, concerning the turnover of Rs. 1,81,528 related to the works contract for the police lines building at Pali. The Sales Tax Officer was directed to separate this turnover from other sales during the accounting period. The parties were ordered to bear their own costs.Application allowed.
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