1998 (2) TMI 480 - SC - VAT and Sales Tax

Clauses of the contracts - Held that - There is no reason whatsoever to conclude, as was urged, that Goel s case 1988 (10) TMI 106 - SUPREME COURT OF INDIA was not properly decided and that it requires reconsideration.

Summary

Issues: Interpretation of contract clauses similar to those in a previous case; Determination of whether the present case aligns with the legal principles established in the previous case.

In this judgment by the Supreme Court of India, the court analyzed the similarity between the clauses of the contracts in question and those considered in a previous case, N.M. Goel & Co. v. Sales Tax Officer. The High Court found the clauses to be akin to those in the precedent case, leading to a decision against the appellants. The court examined the key clauses and affirmed their substantial resemblance to the clause in the previous case. The judgment in Goel's case addressed the issue of whether there was a sale of goods under a specific contract, where the custody and control of the goods remained with one party while being used in construction by the other. The court concluded that there was a sale liable to tax based on the appropriation and agreement regarding the materials supplied for construction purposes.

The appellants argued that there were differences between the present case and Goel's case, emphasizing aspects such as the liberty to retain goods, the deduction mechanism, absence of penal provisions, use of the term "sale," and restrictions on goods usage. However, the court found no significant distinctions between the contracts under consideration and the contract in Goel's case, asserting that their overall effect was similar. The court dismissed any suggestion that Goel's case was wrongly decided or required reconsideration, affirming the alignment of the present case with the legal principles established in the precedent case.

Ultimately, the Supreme Court dismissed the appeals, upholding the decision of the High Court based on the similarity of contract clauses to those in the precedent case and the application of established legal principles regarding the sale of goods under specific contractual arrangements.