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TMI Blog1964 (7) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... orders and that 52,500 c. ft. of ballast should be supplied in every month as basic quantity. The assessees then applied to the Revenue Divisional Officer, Coimbatore, for a permit to quarry stone jelly for bona fide Government purposes and a free permit for quarrying 2,000 c. ft. cart loads of stone jelly from a specified unassessed waste land belonging to the Government of Madras was granted to them, subject to the condition that the jelly was to be used only for bona fide Government purposes. This free permit was granted in accordance with the provisions of the Madras Minor Mineral Concessional Rules, 1959, which allow the grant of permits for quarrying in State Government lands, free of charge, in the case of departments of the Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment also refers to specifications and drawings, but it is common ground that the particular agreement in the present case did not involve conformation to any specification or drawing. This would show that a printed form intended to cover comprehensively all agreements with the Railway of different categories, was utilised for drawing up the agreement in the present case. But we have to adopt for the purpose of this case only the relevant portions of the agreement. The agreement is for collection and training out stone jelly. The term training out appears to be a technical one used in similar contracts, for meaning that the contractor is obliged to deliver the material at the Railway siding between specified points. The learned counsel fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce free of charge for seigniorage, if it is satisfied that the material quarried is to be used for the purpose of the Central Government. A permit for free quarrying was granted to the assessees subject to the condition that the quarried material was to be supplied to the Railway. Thereafter when the assessees quarried jelly from the unassessed waste land belonging to the Government of Madras, the quarried jelly became the property of the assessees. The assessees could not be considered to be the agents of the Railway for the purpose of the quarrying. Under the agreement, they delivered the quarried materials at the specified places in the Railway siding indicated in the contract. It may very well happen that the rate fixed in the contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as it was quarried and that only after transport to the Railway siding and delivery it became the property of the Railway. Our attention has been drawn during the course of the arguments to some prior decisions. State of Andhra Pradesh v. Kalva Suryanarayana[1962] 13 S.T.C. 317. stresses the point to which we have already adverted, namely, that in determining whether a particular transaction is a sale or a contract for work and labour, one has to look into the real nature of the transaction and not merely confine oneself to an undue emphasis on any one aspect of the matter. In that particular case, there was a contract between the Government and the assessee for supply of Gulmohva flower (used for distilling alcohol), and the assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case, the jelly was the property of the assessee from the moment they quarried it and the property was transferred to the Railway at the siding, after it was transported there and stacked. The decision reported in Seth Pamandas Sindhi v. State of Madhya Pradesh[1963] 14 S.T.C. 74., a case of the Madhya Pradesh High Court, has several features which bore a close analogy to this case. There also the assessee entered into contracts with the Railway for supply of ballast. It is stated at page 81 of the report: "It is abundantly clear from those documents that the Collectors of various districts gave leases of quarries to the petitioners in their districts for quarrying stones and sand; and the material was then extracted by the applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a lease of quarrying rights from the owner of the quarry B and quarries metal as a result of that contract and takes it away, it might, in a manner of speaking, be said that the lease itself involves the transfer of property in the quantity so quarried. It is quite possible that the notification may apply to such a case. It does not seem to us that this notification would apply where a person engages himself to supply a certain material, which has necessarily to be quarried. That is a contract for supply and not a contract for quarrying." Applying the principle of this last cited decision, the case on hand involves not a contract for quarrying, but a contract for supply of materials which had necessarily to be quarried. In Chandra Bhan Gosa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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