Works contract versus sale of tiles: factual findings upheld, and sales tax liability sustained under the Tamil Nadu Act.

Receipts from laying and polishing mosaic tiles were treated as turnover from sale of tiles, not consideration for a works contract, under the Tamil Nadu General Sales Tax Act, 1959. The assessment related to a period before liability on works contracts under Section 3B had come into force, and the record showed no customer agreements, no supporting stock or production records, and no proof that materials were taken to customers' sites. On those facts, the fact-finding authority concluded that the transaction was a sale, and the finding was upheld because no perversity or infirmity was shown.

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Issues: Whether the receipts from customers represented consideration for a works contract for laying and polishing mosaic tiles, or the sale value of mosaic tiles liable to tax under the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The dispute concerned assessment year 1985-86, when liability on works contract under Section 3B of the Tamil Nadu General Sales Tax Act, 1959 had not yet come into force. The lower authorities found, on the basis of the record, that the assessee had not produced any agreement with customers, had not maintained the relevant stock and production records, and had not shown materials being taken to customers' sites. On those facts, they concluded that the receipts reflected sale of mosaic tiles and not execution of works contract. The issue was treated as predominantly factual, and no perversity or infirmity in the Tribunal's finding was shown.

Conclusion: The receipts were rightly held to be turnover from sale of mosaic tiles and not works contract; the levy under the Tamil Nadu General Sales Tax Act, 1959 was sustained.

Ratio Decidendi: Where the character of a transaction depends on the contract and surrounding facts, and the fact-finding authority reaches a conclusion that is neither perverse nor unsupported by the record, judicial interference is unwarranted.

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