Distinct commercial commodity treatment for site-fabricated ducting supports taxation despite the works contract argument.

Site-based ducting fabrication was treated as a taxable sale of a distinct commercial commodity, not an indivisible works contract, because the materials were separately supplied and charged, invoices showed a separate material component, and the process of cutting, fitting and assembling G.I. sheets produced a new product that could not be restored to its original form. On that factual basis, the claim that the work escaped assessment merely because it was executed at the customer's site was rejected. Relief under section 3B of the Tamil Nadu General Sales Tax Act was also denied, and the turnover from ducting works was held taxable.

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Issues: Whether the ducting work executed at the customer's site constituted a taxable sale of a different commercial commodity rather than an indivisible works contract, and whether the assessee was entitled to relief under section 3B of the Tamil Nadu General Sales Tax Act.

Analysis: The materials were found to have been supplied separately and the invoices showed that the material component was separately charged, with a substantial advance taken towards materials. The duct was held to be a product distinct from the original G.I. sheets, since the process involved cutting, fitting and assembling the sheets into ducting that could not be simply reversed to restore the original sheets. On that factual basis, the Court rejected the plea that the transaction was a simple composite contract involving labour and materials, and also negatived the claim that the work could escape assessment merely because it was executed at site. The separate charging of material value and the transformation into a different commercial commodity supported taxation of the turnover.

Conclusion: The assessee's challenge failed, and the turnover from ducting works was held taxable.

Ratio Decidendi: Where materials are separately supplied and charged, and the end product emerging from site-based fabrication is a distinct commercial commodity, the transaction is taxable as such notwithstanding the plea of an indivisible works contract.

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