9911796707
TMI Blog1963 (4) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... was rejected, it being held that the contract which the assessee had with the Corporation called for the supply of material and was not a works contract. In the appeal against this assessment before the Appellate Assistant Commissioner, the case of the assessee was advanced on the basis that the contract called for the performance of certain services by the assessee, that is to say, the quarrying and the conveyance of the material, that there was no supply of material for any stipulated price and that there was no element of sale in the transaction. The Appellate Assistant Commissioner examined the contract and some further correspondence with the officials of the Corporation. He came to the conclusion that the transaction should be viewed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued by the State of Madras. In amplification of these arguments, learned counsel claims, that the other contracting party, the Corporation, insisted upon the quarrying of the materials from certain quarries indicated in the contract and that it was not open to the assessee to produce material quarried from any other place. It was no doubt conceded that the quarries wherefrom the materials were to be collected were quarries which belonged to the assessee himself; but, nevertheless, since the contract contains certain specific terms, it should be construed, so it was argued, that it was a contract for the supply of labour and execution of certain works. The agreement between the Lignite Corporation and the assessee has been placed before us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : "Collection of laterite metal 1 1/2" to 3" size, unscreened gravel 1 1/2" granite metal, river sand. Estimate: Rs. 4,70,000 gross." Beneath this followed the various items headed and described thus: No. of item Class description of work to be executed MDSS Unit of Calculation Rates of payment Rs. NP. 1. Supply of hard laterite 1 " to 3" size at stie of work shown by the Corporation Officers along the road margin in and around blocks 24 and 25 of Neyveli Township including stacking for pre-measurement. SS.96 100 C. ft. 12 50 2. * * * * * 3. * * * ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the forms appear to be one designed to meet more than one class of tender. What the tender in effect called upon the assessee to perform was to produce certain quantities of certain specified materials of a specified quality at particular places and the rates of payment were fixed at so much per 100 c.ft. of the material. These rates did in fact vary according as the place of delivery was place A or place B. The assessee was not called upon to do any work for the Corporation in the status of a sub-contractor as it were. The indication of the quarries was only to ensure the quality of the material supplied, for, a clause in the agreement also provided that if the quarry could not supply the material in adequate quantity, the assessee coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... take the transport of the material to the spot indicated. That is clearly not the case. It seems to us that the contract only called upon the assessee to produce certain materials at a particular spot. The mere fact that he had to quarry the material from certain indicated quarries does not alter the situation in any way. Reliance was placed upon a notification of the State of Madras, which is in these terms: "In exercise of the powers conferred by section 6(1) of the Madras General Sales Tax Act, 1939, His Excellency the Governor of Madras hereby exempts earth-work, laterite metal, sand, jelly and gravel quarrying contracts from tax payable under section 3(1) of the said Act." We are exceedingly doubtul whether this notification of exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one of a contract for quarrying. Reliance that has been placed by the learned counsel upon the distances of the quarries from the spot where the material was to be delivered has again no effect upon the relationship between the contracting parties. That was only intended to serve the purpose of fixing the price of the material as delivered at the spot indicated. That does not alter the nature of the contract in any way. In a decision of the Andhra Pradesh High Court in State of Andhra Pradesh v. Kalva Suryanarayana[1962] 13 S.T.C. 317., the case of a contract for the collection and supply of gulmohva flower used for the preparation of alcohol to the Government distillery was in question. The contract required the assessee to collect the flo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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