1967 (10) TMI 61

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..... on to construct bodies and not to sell bus bodies as finished independent units. We do not agree. While accepting the order, the assessee stated that a sum of Rs. 1,250 would be charged towards the cost of constructing one delivery van body on a three wheeler Lambretta chassis supplied by the customer. In another case the sample quotation offered by the assessee to the Commissioner of the Corporation of Madras said that it was for the construction of tipper body on Tata Mercedes Benz and Leyland conventional type chassis supplied by the Corporation. The quotation specified the design, the type of cab, specifications in relation to the rear body, and quoted the price, namely, as so much for constructing each tipper body, plus sales tax at t .....

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..... that the property passed only at the time of delivery of the bus body. It is explicit from this term that if there is no delivery of the bus body as such, there will be no liability for payment. The position would be otherwise if the property in the materials used in the bus body-building passed as and when they were affixed to the chassis. This position also demonstrates that the risk in respect of the materials used in the bus body-building is with the assessee and that before completion of the bus body and delivery thereof, the customer bears no risk in respect of it. It is not stray words used in the contract that by themselves would govern the intention of the parties. The contract will have to be read as a whole and the terms therein .....

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..... rat v. Raipur Manufacturing Co. Ltd.(1), and our judgments in Tax Cases Nos. 170 of 1964(2) and 108 of 1967(3) is applicable. We, accordingly, direct that the turnover relating to sales of aluminium scrap be deleted from the chargeable turnover. There remains for consideration the question of penalty which was imposed in Tax Cases Nos. 257 and 258 of 1966. The Tribunal sustained the penalty levied by the department, though it reduced the quantum. This was on the ground that the assessee failed to includue in its return the turnovers relating to sales of aluminium scrap and also bus bodybuilding contracts. The explanation of the assessee is that in its view the two items of turnover were not liable to tax and that failure to include them in .....

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