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TMI Blog1963 (5) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-81 and Rs. 4,842-08 respectively. The Deputy Commercial Tax Officer determined his net turnover for the year to the best of his judgment at Rs. 2,10,979-59, the total receipts disclosed by the books, and subjected it to tax at the rate of 1 per cent. The assessee preferred an appeal to the Appellate Assistant Commissioner of Commercial Taxes. That officer after giving relief in respect of some items determined the turnover at Rs. 77,685.08 representing the receipts for sale of hosiery goods and value of cloth and tailoring charges. Against this order a further appeal was filed by the assessee to the Sales Tax Appellate Tribunal, which on the facts found that there was no separate sale of cloth to the customers and collection of tailor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree with this observation because the moment the customer selects the cloth from the piece-goods department, settles the price and pays an advance and the cloth so selected is cut and set apart for his use, it becomes his property and is appropriated by him, and the assessee thereafter only supplies work and labour for making the cloth into garments. It is immaterial whether the cloth so selected by the customer is cut in his presence or subsequently and then sent to the tailoring department by the assessee for the purpose of stitching. Thus the transaction consists of two parts, one the sale of cloth by the assessee to his customers and the other contract for work and labour. The assessee relied on the decision in Indralaya Ltd. v. Additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is made up by the tailoring department. In this case, the mere fact that certain material has been selected is not enough to transfer the property. The property is transferred when the material is made up as a completed garment and delivered to the customer." Applying the above tests, it will be clear that the instance case will come under group (2). It is immaterial whether the customer purchases materials to be made into garments from the assessee's shop itself or brings his own goods for the purpose of stitching. The assessee in the present case has got two departments, piece-goods department and tailoring department. The customer is not compelled to utilise the services of the tailoring department. He has proved that he issued two bil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd as pure labour charges they were not taxable; as the taxable turnover was below the minimum it was not liable to be taxed." In the instant case also the assessee has been careful enough to, prepare two separate bills one for the sale of cloth and the other for work charges. As both are exempted from liability to sales tax, the assessee would not be liable to pay any tax on the disputed turnover. We are satisfied that the nature of the transactions is such that there are two separate dealings. When once it is found that these are two separate transactions, the assessee would not be liable to pay sales tax either for the sale of cloth (that being exempt) or for work and labour. Therefore, we set aside the order passed by the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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