TaxTMI 
TaxTMI 
1970 (11) TMI 81
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Bombay Sales Tax Act, 1959 (hereinafter referred to as "the Act"). It deals in watches, timepieces and clocks and also undertakes repairing works. On 27th September, 1957, the concerned Sales Tax Officer, on some information, seized the account books of the assessee and thereafter passed assessment orders enhancing the turnover of sales and purchases. He further found that during the assessment years 1954-55 and 1955-56, the assessee had undertaken repair works from different customers and during the course of these repair works, it had utilised certain spare parts for the purpose of carrying out the repairs. The bills, which were supplied by the assessee to these different customers, were composite bills for the labour work done as wel....
X X X X Extracts X X X X
X X X X Extracts X X X X
....approached the Tribunal in revision and became successful, because the Tribunal, basing its judgment upon the decision given by the Supreme Court in the Government of Andhra Pradesh v. Guntur Tobaccos Ltd.[1965] 16 S.T.C. 240 (S.C.)., allowed the revision application and held that the materials which were utilised by the assessee during the execution of the repair works were not sold and the property in these materials passed only incidentally. 5.. Being aggrieved by this decision of the Tribunal, the department has preferred this reference. The Tribunal has referred to this court, the following two questions for opinion: "(1) Whether on the facts and in the circumstances of the case contracts evidenced by the various bills aggregatin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....out. In this bill names of spare parts were mentioned. But they were issued for one lump sum without any bifurcation for labour charges and the value of the spare parts utilised during the course of the execution of the work. These facts show very clearly that the contracts were purely for labour and that, if, during the execution of these contracts, any materials were utilised by the assessee, the supply of these materials was merely incidental to the execution of the work undertaken by the assessee. If this is so, it cannot be said that the materials which were utilised in carrying out the repair works were sold by the assessee as "materials". The case would in that case be completely covered by the ratio of the decision of the Supreme Co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ded by a Division Bench of this Court, were rather more favourable to revenue than the facts of the case under our consideration so far as this point is concerned. In that case, the assessees were carrying on the business of body-builders of motor chassis supplied by the customers. They entered into a contract with a firm for the construction of a body of a truck belonging to that firm. After the work was over, the assessees prepared two bills, one in respect of materials used for building the body and another for labour charges. On these facts the assessees contended that the contract in question was not a contract for sale of goods but was either (1) a purely works contract or (2) a composite agreement consisting of two distinct and separ....