TaxTMI Login
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Just a moment...
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: Whether the agreement for manufacture and supply of kiln-burnt bricks for construction work was a works contract or a contract of sale of bricks.
Analysis: The nature of the contract had to be determined from its terms as a whole and the surrounding circumstances, with emphasis on the real intention of the parties and the essential character of the transaction. The contract required manufacture on Government land, use of Government-supplied land and earth free of rent and charges, strict supervision by the Executive Engineer, restrictions on sale to others, obligations regarding labour, time, and quality, and compulsory purchase by the Government even of inferior bricks and brick-bats at stipulated rates. These features were found to be inconsistent with a pure sale of goods and showed that the contractor was engaged to apply skill and labour to produce the required bricks for the Government. Mere use of sale-like expressions or the incidental passing of property in the finished bricks did not alter the essential character of the arrangement.
Conclusion: The contract was held to be a works contract, pure and simple, or at least a composite and indivisible contract of work and labour with incidental supply of materials, and not a contract of sale of bricks; the answer was therefore in favour of the assessee.
Final Conclusion: The reference was answered by holding that the transaction was not exigible as a sale of bricks under the Act, and the assessee succeeded on the central classification issue.
Ratio Decidendi: The true nature of a contract for tax purposes must be gathered from its substance and essential character, and where the dominant object is the performance of work with labour and skill, incidental passing of property in materials does not convert it into a sale.
TaxTMI 
TaxTMI 
