Works contract tax on manufactured shutters upheld where property in goods passed to the customer on installation.

Tax was upheld on shutters manufactured to specification and installed under a works contract because incorporation of the goods at the customer's site involved transfer of property in those goods. The court treated the transaction as including a sale element notwithstanding that the shutters were made and fitted on site, and held that tax could be levied on the value of the goods so transferred. Following earlier decisions and Supreme Court authority on works contracts, the challenge to the assessment failed and the revision was dismissed.

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Issues: Whether tax was leviable on the value of shutters manufactured and installed in execution of a works contract.

Analysis: The assessee executed a contract requiring manufacture of shutters to specification and their installation at the work site. The fact that the material was taken to the customer's site and incorporated in the contract work did not exclude a sale element. In a works contract, where the execution of the work results in transfer of property in the goods used, tax can be levied on the value of the goods so transferred. The Court followed its earlier decisions and the Supreme Court decision on similar works contract treatment.

Conclusion: The levy of tax on the shutters was upheld and the assessee's challenge failed.

Final Conclusion: The assessment treating the shutters as taxable in the course of execution of the works contract was sustained, and the revision was dismissed.

Ratio Decidendi: In a works contract, if materials are incorporated into the work so that property in goods passes to the customer, the transaction is taxable notwithstanding that the goods are manufactured and installed at the work site.

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