Bus body fabrication on customer-supplied chassis was treated as a sale, not a works contract, on the contract terms and facts.

Erection of bus bodies on customer-supplied chassis for a fixed price, without any fabrication material supplied by the customer, was treated as a sale within the State rather than a works contract. The court relied on the contractual terms and concurrent factual findings, including the use of D forms consistent with taxable sales to a Government department at concessional rate, and found no basis to disturb that characterisation. The transaction was therefore held taxable as a sale, the assessment and tax liability were sustained, and the penalty was set aside.

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Issues: Whether erection of bus bodies on chassis supplied by customers amounted to a sale within the State rather than a works contract.

Analysis: The agreement provided for fabrication of bus bodies on chassis supplied by the customer for a fixed price per body, with no material for fabrication to be supplied by the customer. The factual findings recorded that the transaction could not be construed otherwise than as a sale within the State of Punjab, particularly when the dealer had obtained D forms, which are consistent with taxable sales to a Government department at a concessional rate. The factual matrix did not disclose any basis to disturb the concurrent findings on the character of the transaction.

Conclusion: The issue was decided against the assessee and the transaction was held to be taxable as a sale.

Final Conclusion: The appeal failed, and the assessment and tax liability were sustained while the penalty was set aside.

Ratio Decidendi: Where the customer supplies only the chassis and the dealer fabricates bus bodies for a fixed price without supplying fabrication material, the transaction is a sale and not a works contract.

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