Composite supply of ballasts treated as sale, not works contract, where goods passed on delivery and composite pricing covered all charges.

Supply of hard broken ballasts to the Railways at specified rates was treated as a sale, not a works contract, because the assessee remained owner of the goods until stacking and delivery, and the agreement fixed a composite price covering supply, delivery, loading, handling and related charges. No separate billing or payment for transportation was shown, so the dominant character of the arrangement was transfer of goods as goods rather than labour or services. The entire composite consideration was therefore liable to tax.

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Issues: Whether the transaction of supply of hard broken ballasts by the assessee to the Railways at specified rates was a sale or a works contract.

Analysis: The assessee was found to be the owner of the ballasts and the property in the goods passed only after the goods were stacked and delivered to the Railways. The agreement showed a composite price covering supply, delivery, loading, handling, and related charges, and there was no separate billing or payment for transportation. On these facts, the dominant character of the transaction was supply of goods as goods and not a mere contract for labour or services.

Conclusion: The transaction constituted a sale and not a works contract, and the entire composite consideration was liable to tax.

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