1960 (2) TMI 40

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.... 1951-52. These are sums received by the petitioner from the Public Works Department on account of certain construction works. These works were executed by the petitioner on the basis of tenders and acceptance thereof, incorporated in two different types of agreements, or forms of contracts. One agreement is for the construction of 40 Junior Officer's residences on Baylay Road under the Construction Division, P.W.D., Patna, executed in Form F-2, under which the petitioner received payments aggregating to Rs. 1,47,690 in 1950-51 and Rs. 57,307 in 1951-52. The other agreement, which pertains to the construction of the hostel and subsidiary buildings at the Langat Singh College, Muzaffarpur, in the Northern Division of the P.W.D., under which ....

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..... Ambastha, learned Advocate appearing for the petitioner, that both these agreements, in essence are indivisible building contracts, and, therefore, on the basis of the Supreme Court's decision reported in The State of Madras v. Gannon Dunkerley & Co., (Madras) Ltd.[1958] 9 S.T.C. 353. , the petitioner is not liable to sales tax for payments made to him under these building contracts. 2.. The learned Deputy Commissioner, Sales Tax, has dealt with both these agreements on the same footing. In his view, although they are building contracts, they are not indivisible and that under the contracts there was a sale of goods supplied by the petitioner, quite distinct from the remuneration payable to him for his labour and other services and as suc....

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....of any clause in the contract but the title to the materials passed to the other party to the contract on the theory of accretion. In the present case there is an express provision in the contract to the effect that all materials and plant brought by the contractor on the site under the German and Indian sections would immediately they are brought upon the site become the owner's property. The material clause in the contract states as follows: 'All materials and plant brought by the contractor upon the site under the German and Indian sections in connection with the construction of the Coke Oven and Byproducts Plant shall immediately they are brought upon the site become the owner's property and the same shall not on any account whatsoever....

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....rs' residences, which does not contain a similar clause. There, the petitioner's contention that it is an indivisible building contract would appear correct and must be upheld. I see no warrant for the learned Deputy Commissioner holding, as he did, that in regard to items 19, 21 to 25, 46 and 68 of the items of work mentioned in the agreement, a separate sale of the materials was contemplated in terms of the agreement. In the absence of a provision similar to clause (8) of the other agreement, there is no clause in the agreement by virtue of which the property in the materials supplied would pass to the opposite party other than by way of accretion on construction of the building. The items of tender are also for finished items as are to b....