TaxTMI 
TaxTMI 
1978 (12) TMI 147
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....977 decided on 12th September, 1978; since reported at [1978] 42 S.T.C. 409 (S.C.).,which affords considerable guidance and almost concludes the determination of the question in favour of the assessee. The assessee, who is the appellant before us, is a partnership firm carrying on the business, inter alia, of manufacturing and erection of cranes. During the assessment year 1965-66, the assessee entered into two contracts for supply and erection of 3-motion electrical overhead travelling cranes, one with M/s. Kamlapat Moti Lal Sugar Mills and the other with M/s. Upper Doab Sugar Mills Ltd. The contract with M/s. Kamlapat Moti Lal Sugar Mills provided for supply and erection of one 3-motion electrical overhead travelling crane at the price of Rs. 1,34,500 and on the terms and conditions set out in a letter addressed by M/s. Kamlapat Moti Lal Sugar Mills to the assessee: "We confirm all the specifications given in your above-referred quotation with the following changes: 1.. Structural capacity will be suitable for safe-load of two unloading crabs, i.e., 10 tons. 2.. Span of the long gantry which is given 50' will be confirmed shortly. 3.. Your supply will also inclu....
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.... sockets for hand lamp. 4. One electric light point. 5. One alarm bell and all other necessary fittings. Steps/ladders will be provided from the crane bridge for easy access to the cabins. (iv) Wiring: Wiring with V.I.R. wire in steel conduit pipes will be provided between individual motors and controllers, current collectors and resistances in the cabin. For connection of current to the trolley, a set of bare copper conductors complete with insulators and strainers mounted on the bridge will be provided. A set of current collectors will be mounted on the trolley, containing renewable graphitic carbon collectors. Price: That for two complete cranes of the above-mentioned specifications with two crabs each including erection, the company will pay to the contractor at the rate of Rs. 1,19,000 per crane with two crabs each including erection complete in all respects with necessary equipment. Mode of payment: 1.. 30 per cent with the order. 2. 20 per cent after two months of the actual commencement of work. 3. 25 per cent after the completion of erection of columns and bridge. 4. 15 per cent after completion and giving satisfactory trials. 5. 10 per cent a....
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....tracts for work and labour. If they were contracts of sale, the amounts of Rs. 1,34,500 and Rs. 2,38,000 would b.- taxable as sale price forming part of the turnover, but not so, if they were contracts for work and labour. The Sales Tax Officer took the view that the contracts were essentially contracts of sale of ready-made cranes and the erection of the cranes at the factory site was merely incidental to the sale and the amounts of Rs. 1,34,500 and Rs. 2,38,000 received under the contracts were, therefore, taxable. This view was upheld by the Assistant Commissioner in appeal, but on an application for revision being filed by the assessee, the Additional Judge (Revisions) held that each of the two contracts was a works contract not involving any sale of goods and hence the amounts of Rs. 1,34,500 and Rs. 2,38,000 were not exigible to sales tax. The Commissioner of Sales Tax thereupon applied for a reference and on his application, the following two questions of law were referred for the opinion of the High Court: "(1) Whether, in the facts and circumstances of the case, the turnover of Rs. 1,34,500 made by the assessee in respect of Kamlapat Moti Lal Sugar Mills amounts to a....
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....terials are used in execution of such work. This test has been recognised and approved in a number of decisions of this Court and it may now be regarded as beyond controversy, but the real difficulty arises in its application as there are a large number of cases which are on the border-line and fall within what may be called grey area. To resolve this difficulty, the courts have evolved some subsidiary tests and one of such tests is that formulated by this Court in Commissioner of Sales Tax, Madhya Pradesh v. Purshottam Premji [1970] 26 S.T.C. 38 (S.C.)., where it has been said: "The primary difference between a contract for work or service and a contract for sale of goods is that in the former there is in the person performing work or rendering service no property in the thing produced as a whole.....In the case of a contract for sale, the thing produced as a whole has individual existence as the sole property of the party who produced it, at some time before delivery, and the property therein passes only under the contract relating thereto to the other party for price." This was the test applied by this Court in State of Rajasthan v. Man Industrial Corporation [1969]....
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....omponent parts do not constitute a rolling shutter until they are fixed and erected on the premises. It is only when the component parts are fixed on the premises and fitted into one another that they constitute a rolling shutter as a commercial article and till then they are merely component parts and cannot be said to constitute a rolling shutter. The erection and installation of the rolling shutter cannot, therefore, be said to be incidental to its manufacture and supply. It is a fundamental and integral part of the contract, because without it the rolling shutter does not come into being. The manufacturer would undoubtedly be the owner of the component parts when he fabricates them, but at no stage does he become the owner of the rolling shutter as a unit so as to transfer the property in it to the customer. The rolling shutter comes into existence as a unit when the component parts are fixed in position on the premises and it, therefore, becomes the property of the customer as soon as it comes into being. There is no transfer of property in the rolling shutter by the manufacturer to the customer as a chattel. It is essentially a transaction for fabricating component parts and ....
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.... are given in the publication of the Indian Standards Institution. It may be noted that even so far as the columns are concerned, they are not fabricated by the manufacturer in his factory and then taken to the site. Each column has a height of about 40 feet and it is made in three or four pieces and these pieces are joined together with bolts and welded at the time of erection at the site. Thereafter a 120 feet long gantry is assembled by the manufacturer in eight pieces and each piece is placed on two columns and the erection of the gantry on both sides is completed after bolting and welding the gantry with the columns. Then about 60 pieces are fixed on to the gantry on both sides to form a platform to facilitate the operation and maintenance of the crane and the component parts of the railings are assembled at the site with bolts and welded to the gantry. Two distance pieces assembled out of diverse component parts are then fixed between both ends of the gantry to ensure stability. The manufacturer has to examine and ensure the levelling and alignment of the gantry and then the component parts of the rails are assembled and fixed on both sides of the gantry by means of M.S. c....