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TMI Blog1967 (5) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... Mysore; and (ii) Rs. 43,349.05 for the fabrication and installation of "bottle coolers" under orders from customers at different places. The assessing authority rejected the claim of the respondents. In the view of the assessing authority under the terms of the contract with the co-operative society the respondents manufactured certain articles according to specifications and despatched them to Mysore State and there- after the articles were installed by the employees of the respondents at the site of the factory of the society, and on that account the transaction was one primarily for sale of steel structures to the society, and the respondents had in addition thereto contracted to instal or erect the structures. The assessing authority in dealing with the second item held that the respondents had sold bottle cooling units to their customers and the contracts for sale of the units were not converted into works contracts merely because the respondents installed the units in the premises of the purchasers. In appeal the Appellate Assistant Commissioner of Commercial Taxes held that the first item was one for execution of work, and was not assess- able to sales tax. He agreed with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds must be distinguished from a contract for work and labour. The distinction is often a fine one. A contract of sale is a contract whose main object is the transfer of the property in, and the delivery of the possession of, a chattel as a chattel to the buyer. Where the main object of work undertaken by the payee of the price is not the transfer of a chatter qua chattel, the contract is one for work and labour. The test is whether or not the work and labour bestowed end in anything that can properly become the subject of sale; 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, whether the contract is in substance one for work and labour or one for the sale of a chattel." In Clark v. Bulmer [1843] 11 M. & W. 243., the plaintiff entered into a contract with the defendant "to build an engine of 100 horse-power for the sum of GBP 2,500, to be completed and fixed by the middle or end of December". Different parts of the engine were built at the plaintiff's manufactory and were sent to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the "offer was worked out only on a tonnage basis, further details to be furnished at a later date". Then the letter set out the quotation as follows: "1. Fabrication, supply and erection at site of all steelwork in columns, trusses, purlins, bracing, side claddings, supports, crane girders etc. including supply of all rivets, bolts and nuts, and painted one shop coat of red oxide before despatch. Price per ton of steelwork ... Rs. 1,160 (Rupees one thousand one hundred and sixty only). 2.. Erection only of A.C. roofing and side cladding sheets with A.C. accessories including supply of all G.I. bolts, nuts, washers, the A.C. materials being delivered by you to us free at site of work ... Rs. 25 (Rupees twenty-five only) Our prices for gutters, downpipes, louvres etc., will be submitted later, if required." The letter then proceeded to set out certain conditions relating to structural steel, rivets, bolts and nuts and imported steel. Condition No. 4 related to delivery and read as follows: "Our rates quoted for the fabrication and supply of all steelwork will be for delivery F.O.R. our works siding, Madras. All freight, unloading and cartage charges from Madras to site wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the actual completion of the erection work; (c) no provision under the contract for dissecting the value of the goods supplied and the value of the remuneration for the work and labour bestowed in the execution of the work; (d) the petitioner (the respondents) not being a dealer carrying on business in the steel and component parts required for the erection work and that the component parts had to be specially fabricated so as to be suitable for particular erection work; (e) the predominant idea underlying the contract being the bestowing of special skill and labour by the experienced engineers and mechanics of the petitioner (the respondents) company." We have carefully gone through the correspondence between the parties and after considering the arguments advanced by counsel for the State, we hold that the High Court was right in the conclusions they reached about the essential features of the contract between the parties. Counsel for the State invited our attention to the bills submitted by the respondents from time to time between October 31, 1957 and June 30, 1959. In these bills charge was made under the head "fabrication and supply of steelwork" at the rate of Rs. 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riven by 1/2 HP, 220/230 volts, 50 cycles, single phase A.C. motor, 4 Nos. full and 2 Nos. half six brass tinned inner vessels (delivered F.O.R. Hubli and installed at their address) at Rs. 4,619. The work order dated December 13, 1957, which recorded the work done at the site at which the bottle cooling equipment was installed, set out the various steps taken: "Unpacked crates, checked up cooler, marble, vitrolite and found all intact. Placed the cooler on the plinth area, given measurements for the condensing unit, placed the unit in position, given pipe connections etc. evacuated system, allowed gas pressure, tested joints for leaks etc. and shut down the cooler and left the machine idle for want of motive power to continue the peformance. After obtaining power connection, restarted the cooler, mixed up calcium chloride, tested joints for leaks etc., charged F 12 gas and oil to system; throttled suction line, opened up valves fully, adjusted THV OS valve etc., checked up performance of the cooler, loaded the cooler, adjusted MX6 AC valve, checked up a few cycles of operation and left the machine in working order." An inclusive price was charged by the respondents for the work ..... X X X X Extracts X X X X X X X X Extracts X X X X
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