TaxTMI 
TaxTMI 
1975 (1) TMI 77
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....s and sell these blocks to their customers. A question arose in the assessment of the respondents for the period 1st April, 1954, to 31st August, 1955, whether the preparation and supply of designs by the respondents to their customers constituted a contract of work and labour or a sale. The Sales Tax Officer came to the conclusion that the transactions in question were sales. On appeal, the Assistant Commissioner of Sales Tax also took the same view and this was confirmed in revision by the Deputy Commissioner of Sales Tax. In further revision to the Sales Tax Tribunal, the Tribunal, however, reversed the orders of the lower authorities and held that the preparation and supply of designs by the respondents to their customers were not sa....
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....rmining in which category a particular transaction falls. The test is one of the intention of the parties which is to be gathered from the terms of the contract and the surrounding circumstances. If the parties intend to contract for a chattel, then it is a contract of sale even though work or skill and labour may have to be bestowed in bringing into being the chattel. If the parties contract for the rendering of work and labour or skill and labour, it is not a sale, though in the execution of the contract the passing of materials may incidentally be involved. In support of his submission that the transactions in question were sales, Mr. Cooper relied upon Lee v. Griffin(1861) 30 L.J.Q.B. (N.S.) 252. In that case, there was a cont....
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....stowed can in any case be the test of what is the cause of action; and that if Benvenuto Cellini had contracted to execute a work of art for another, much as the vaue of the skill might exceed that of the materials, the contract would have been the less for the sale of a chattel." Relying upon this authority, it was urged by Mr. Cooper on behalf of the applicant that the real test is whether or not the work and labour bestowed end in anything that can properly become the subject of sale and that neither the ownership of the materials nor the value of the skill and labour as compared with the value of the materials is conclusive, although such matters may be taken into consideration in determining, in the circumstances of a particular case, ....
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....tions quoted above that whenever there was an agreement whereby a chattel would ultimately have to be delivered, that was of necessity a contract for the sale of goods, so wide a proposition cannot be supported. We will now turn to an authority of our own High Court, namely, Camera House, Bombay v. State of Maharashtra[1970] 25 S.T.C. 354. In that case one of the questions which the court had to decide was whether a contract for the taking of a photograph as well as the developing the negative thereof was a contract of skill and labour or a contract of sale. This High Court took that view that it was a contract of work, skill and labour. The court observed (at pages 367-368): "It is impossible to say that the first part of the transac....
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.... studio and described himself as a commercial artist and who received orders from film producers and distributors for preparing designs for advertisement purposes, was selling designs or whether the contracts entered into with him were contracts of skill, work and labour. The Madras High Court referred to two earlier decisions of the same High Court, namely, D.P. Roy Chowdhury v. State of Madras[1962] 13 S.T.C. 866., in which it was held that a sculptor commissioned to make bronze casts was not a dealer and that the contracts by which he was so commissioned were contracts of work and labour and not contracts of sale, and V.K. Baraskar v. State of Madras[1963] 14 S.T.C. 615., in which it was held that an artist who drew pictures for remunera....