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TMI Blog1964 (9) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... ove. In regard to the second item, the contention of the dealer (assessee) was that they were only contracts for work and labour and not sales of goods, and, therefore, not assessable to tax. The Joint Commercial Tax Officer, the Appellate Assistant Commissioner and finally the Sales Tax Appellate Tribunal, who examined the claim of the assessee at the several stages of assessment, appeal and further appeal, disallowed his claim and the assessee has come to this Court in revision. The petitioner-assessee contended in regard to the first item in dispute, that it represented sales of old second-hand radio sets which the assessee had purchased in exchange for new radio sets sold by him to customers, and that therefore they should not be assessed as first sales in the State, in his hands. He also urged that the authorities below applied the presumption under section 10 of the Madras General Sales Tax Act, 1959, wrongly. That section says that the burden of proving that any dealer or any of his transactions is not liable to tax under the Act shall lie on the dealer. According to the learned counsel appearing for the assessee, the department had to establish at the outset, by some reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of an exemption, and the burden of proving that this exemption is available to him is laid on the dealer. The reason for it is obvious. In almost all cases, the question whether a sale is a first sale or a second sale will be primarily a question of fact. This will be entirely within the special knowledge of the dealer, and it is for him, who is in possession of the material facts to supply them. Such an obligation of discharging the burden of proof can be deduced from section 106 of the Indian Evidence Act, apart from section 10 of the Sales Tax Act. What section 10 lays down is, therefore, the same broad principle enunciated in section 106 of the Evidence Act, that the onus is on the person who is in possession of special facts exclusively within his knowledge, to disclose them to the Court, when he seeks to obtain any benefit for himself on the basis of proof of those facts. In our opinion, section 10 in the 1959 Sales Tax Act, only consolidates the provisions in the 1939 Act about the burden of proof found both in section 3(2), second proviso, and also in section 5-B. In the present case, the assessee-dealer was in a position to supply the necessary facts which would prove t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strictness work, labour, and materials done and provided by the plaintiff for the defendant. In Lee v. Griffin (1861) 30 L.J.Q.B. 252. a contract to make a set of artificial teeth to fit the mouth of the customer was the bargain that came up for examination. The Court of the Queen's Bench came to the conclusion that it was a contract for the sale of goods and not a contract for work, labour and materials. The Judges who dealt with the case in Lee v. Griffin (1), were of the opinion that the decision in Clay v. Yates (2) turned upon the peculiar circumstances of that case and that it would apply only to a case where a precisely similar situation would arise. Crompton, J., observed: "I do not agree with the proposition, that whenever skill is to be exercised in carrying out the contract, that fact makes it a contract for work and labour, and not for the sale of a chattel..... In the present case the goods to be furnished, viz., the teeth, are the principal subject-matter; and the case is nearer that of a tailor, who measures for a garment and afterwards supplies the articles fitted". In Robinson v. Graves (3), another decision cited in this connection, the plaintiff, an artist, was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aintiffs a mink jacket for his wife. After inspecting several skins he chose a colour and selected a style for the jacket. The price was £950. After referring to the decisions in Lee v. Griffin [1861] 30 L.J.Q.B. 252. and Robinson v. Graves[1935] 1 K.B. 579., the learned Judges observed (page 16): "A high degree of skill and craftsmanship goes into the making up a fur jacket such as was made for the defendant in this case, but it was no more than making an article for sale to the defendant on his special order. I cannot discover anything to distinguish this from the case of an ordinary article which it is part of someone's business to supply and which he makes up to special measurements for the customer. It requires skill, labour and materials to make it, but the purpose of the transaction is the supply of the complete article and the receipt of the price." The transaction in the above case was, therefore, treated as a sale. Benjamin on Sale (eighth edition) has referred to the early English decisions and observed that "the dividing line will be in many cases a difficult one to draw. The rule suggested in Lee v. Griffin [1861] 30 L.J.Q.B. 252. by Blackburn, J., may have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e photographs was raised, because the learned Judges observed: "That the transaction is a sale is not, and doubtless could not, be disputed. "They were concerned with the question whether an element of manufacture was involved in the production of photographs, because under the Australian enactment sales tax was levied upon the sale of goods manufactured in Australia. Nevertheless, certain observations of the learned Judges, which have a direct bearing on the question whether a photographer's work involves a contract for labour and materials or sale of goods, may be quoted (page 79): "The end of the organised business of a portrait photographer is to produce as many copies of a picture as his customer will but, and to sell them to him with a view to profit. It differs from many other productive arts in the fact that its products must be designed in each case for one individual, and in its attempt to secure some aesthetic value. But it is a process practised commercially to produce an article which will be bought. A tailor must attempt to fit his individual customer and the manufacturer of ornaments might claim that his designs had an aesthetic purpose." It may also be worthwhile t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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