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TMI Blog1955 (7) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... earth used in the process is supplied free by Government from their land, and the contract consists in merely remo- ving the earth to the embankment. The petitioner was called upon to register himself as a "dealer" under the Act, but he refused to apply for a certificate on the ground that he is not liable to pay tax, because his contract with the Public Works Department did not involve any sale or purchase of goods. The Sales Tax Officer overruled his objec- tion and assessed him to tax, after making a statutory deduction of 30 per cent of the gross turnover as representing the cost of labour. The petitioner was also penalised and fined Rs. 50 for his wilful failure to apply for registration of his business. The Assistant Collector of Sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contractor) and also materials for removing the earth. He must therefore be held to be supplying goods". On appeal, the Revenue Commissioner took an entirely different view from those taken by the other officers of the Department. In his opinion, the contractor took possession of the earth and therefore may be said to be exercising ownership thereof. Secondly, "as it is not easy to trace the same earth from the pit to the embankment since the earth may have got transformed from the manner in which it was on the ground to the manner in which it came on to the embankment, there was a transfer of ownership". Dealing with the use of tools and plant by the Mulias the Revenue Commissioner held that as these were obviously more or less destro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale satisfies the defi- nition of the word "dealer". Unless all these elements are satisfied it cannot be said that the liability to tax has been incurred. It is only when all these elements are found to be present, that the Legislature authorises the levy of a tax, but transactions which do not, in law, amount to sales of goods are not taxable and the courts will be astute in examining the effect of each transaction before upholding the levy. In Ladore v. Bennet(1), it was observed by Lord Atkin as follows: "It is unnecessary to repeat what has been said many times by the Courts in Canada and by the Board, that the Courts will be careful to detect and invalidate any actual violation of constitutional restrictions under pretence of keepin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.C. 468. only be done by the employment of labour; and labour includes not only the use of human agency but also the employment of tools and appliances. Another principle which is equally well established is that the materials provided by a contractor and used in the execution of a contract cannot be regarded as being appropriated to the contract or as sold unless they have been affixed to or in a reasonable sense made a part of the corpus (See Heath v. Moore(1)). The crucial test therefore is whether the materials that are affixed to the corpus, namely, the embankment, and have passed to the Govern- ment consist of only the earth which was already the property. of Government or something more. It is of course open to the parties to have s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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