Works contract characterization of cement and steel supplies requires examination of the entire contract under the governing legal test.

Supplies of cement and steel by the assessee to contractors for residential construction had to be tested on the contract as a whole to determine whether they were sales exigible to sales tax or only materials provided in execution of a works contract. The controlling question was the legal character of the supply clauses, read with the entire arrangement, rather than the form of individual provisions. Because the Tribunal had not applied the later governing precedent, the matter required fresh examination under the correct legal test. The Tribunal's order was set aside and the dispute remitted for reconsideration in accordance with the binding legal position.

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Issues: Whether the supplies of cement and steel by the assessee to its contractors were sales exigible to sales tax or formed part of a works contract, and whether the Tribunal's order required reconsideration in the light of the governing precedent.

Analysis: The revision concerned contracts for construction of residential houses in which the assessee supplied cement and steel to contractors under controlled terms. The decisive inquiry was whether the supply clauses, read with the contract as a whole, showed a sale of goods or merely the provision of materials in execution of a works contract. The Tribunal had not had the benefit of the later decision laying down the applicable test, and the Court held that the matter had to be examined afresh on that basis.

Conclusion: The Tribunal's order was set aside and the matter was remitted for fresh decision in accordance with the binding legal position.

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