Motor body fabrication on customer chassis is treated as sale of goods and taxed as a motor vehicle component.

Contracts for constructing bus and lorry bodies on customer-supplied chassis were treated as sales of goods where the contractor used its own materials, delivered completed bodies for a consolidated price, and the finished body became the customer's property on completion. The motor body was also treated as an integral component of a motor vehicle because a chassis alone is not a complete vehicle, so the turnover fell within the higher-rate entry for motor vehicles and their parts. The later amendment was regarded as clarificatory and did not change the earlier position.

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Issues: (i) whether the contracts for constructing bus and lorry bodies on chassis supplied by customers were sales of goods or mere works contracts; (ii) whether, if taxable, the turnover was liable to tax at the general rate or at the higher rate applicable to motor vehicles and their parts.

Issue (i): whether the contracts for constructing bus and lorry bodies on chassis supplied by customers were sales of goods or mere works contracts.

Analysis: The contracts were for construction and supply of completed motor bodies on customer-supplied chassis, with the contractor using its own materials and receiving a consolidated price per body. The substance of the transaction was transfer of property in the finished bodies, not a contract where skill and labour were merely ancillary. The body built and fitted to the chassis became the customer's property on completion, and the transaction fell within the legal concept of sale rather than a works contract.

Conclusion: The contracts were sales of goods and not mere works contracts.

Issue (ii): whether, if taxable, the turnover was liable to tax at the general rate or at the higher rate applicable to motor vehicles and their parts.

Analysis: The motor body forms an integral part of a motor vehicle, because a chassis by itself is not a complete vehicle. The body is therefore a part or component of a motor vehicle and falls within the higher-rate entry for motor vehicles and their component parts. The later amendment was treated as clarificatory and did not detract from the earlier position that motor bodies were already covered by the entry.

Conclusion: The turnover was taxable at the higher rate applicable to motor vehicles and their component parts.

Final Conclusion: The revision cases failed on both issues, and the assessments were sustained.

Ratio Decidendi: A contract to construct and supply motor bodies on customer-supplied chassis, using the contractor's own materials for a lump sum per body, is a contract of sale of goods, and the resulting motor body is a component part of the motor vehicle for rate purposes.

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