2014 (7) TMI 1122

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....the Andhra Pradesh State Road Transport Corporation. As part of its activities, it acquires vehicles and operates them on the routes, in various parts of the State. In the process of acquiring buses, as a first step, it purchases chassises of the description, which are suitable for its use, from various manufacturers. Thereafter, steps are taken to get the bodies of buses built, on the chassises. The process is not uniform. Buses of different varieties, such as deluxe, express and ordinary, are thus procured. Tenders are invited from the eligible agencies duly indicating the specifications of buses. On finalising of the contract, the successful fabricator is handed over the chassises, with an understanding that after the body is built there....

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....rtified from the fact that the chassises for the bus was supplied by the respondent itself. He submits that once the work was undertaken by the agency to construct a bus body, that too according to the specifications furnished by the respondent, the only conclusion that can be arrived at is that, what was undertaken by the agency was a work and not at all, an activity of manufacture. He contends that it is only when a trade or manufacture was undertaken, that the concept of sale would come into existence and not when a work is done according to the specifications. He placed reliance upon the judgments of the Supreme Court in T. V. Sundaram Iyengar and Sons v. State of Madras, AIR 1974 SC 2309 ; 35 STC 24 (SC). According to him, the judgment....

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....The entire dispute revolves around the answer to the question as to whether the activity entrusted by the respondent to fabricators of a bus, amounts to a work or works contract on the one hand or a sale. If it is the former, section 194C of the Act gets attracted and if it is the latter, it is not. It is not difficult to draw the distinction between a work on the one hand, and a sale, on the other hand. Though the activities cannot be described with mathematical precession, the broad features thereof can certainly be discerned. Work involves the discharge of some functions by a person or agency to whom it its entrusted. Basically, the nature of work is determined by the person, who entrusted it, and the material that is needed for the wo....