1973 (4) TMI 107 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the supply of sand by the assessee to the public works department constitutes a sale or a works contract.
2. Whether the contracts produced by the assessee were sufficient to establish the nature of the transactions.
3. Whether the Tribunal's decision on the nature of the transactions was correct.

Detailed Analysis:
1. The judgment of the court involved two cases concerning the assessment years 1963-64 and 1964-65 where the assessee supplied sand to the public works department. The dispute centered around whether the transactions constituted a sale of sand or a works contract. The assessee argued that it was a works contract, while the tax authorities and the Tribunal considered it a sale. The Tribunal found that the price charged by the assessee for the sand represented the actual price of the sand supplied. The court agreed with the Tribunal's decision, concluding that the assessee had sold sand to the department and collected the price, based on the nature of the transactions and the absence of evidence supporting a works contract.

2. The assessee failed to produce the original contracts or typed copies during the proceedings before the sales tax authorities and even before the Tribunal, despite repeated opportunities. The Tribunal had to make its decision without the benefit of seeing the contracts. The court noted that the assessee's offer to produce the contracts during the hearing was not sufficient grounds to postpone the cases, given the failure to provide the contracts earlier in the proceedings. This lack of evidence hindered the assessee's ability to establish the nature of the transactions as works contracts.

3. The court referenced a previous case where a similar issue was considered, involving the procurement and supply of pebbles. In that case, the court held that the transaction was a sale of pebbles rather than a works contract. Drawing parallels, the court in the present judgment emphasized that the assessee in the current cases paid seigniorage fee for collecting sand, indicating ownership of the sand. The court concluded that the assessee became the owner of the sand upon collection from the river and subsequently transferred ownership to the public works department upon supply, affirming the Tribunal's decision that the transactions were sales of sand.

In conclusion, the court dismissed the tax cases, upholding the Tribunal's decision that the transactions between the assessee and the public works department constituted sales of sand rather than works contracts.