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TMI Blog1972 (3) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner. It is said that the work which is required to be carried on under the agreements consists of the following operations: (1) breaking, ballasting or quarrying of boulders from outside railway line; (2) converting boulders into required sizes of stone ballast; (3) transporting the broken stone ballast by the lorries to the site of the works, which is generally situated along the railway line or at different places in the station yards; (4) screening stone ballast from any dust and removing undersized or oversized stones; (5) stacking the ballast along the railway line or in station yards or over banks or in cuttings; (6) training out or leading into track the stone ballast from the stacks is also done by the contractor in certain cases. All the contracts referred to above are of identical nature. The petitioner obtained lease-hold rights from the Government of Andhra Pradesh under the Andhra Pradesh Minor Mineral Concession Rules for quarrying out the stone for the execution of the work at a fixed rent. The particular quarry was obtained by the petitioner at a fixed annual rent of Rs. 1,200 plus a cess of Rs. 444 per annum. The petitioner voluntarily submitted assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ef counter the respondents submitted that the petitioners were assessed on the basis of returns filed by them voluntarily. No agreements were produced any time before the assessing authority. The petitioners never objected to the levy of tax on the turnovers submitted by them in the returns and voluntarily paid the taxes. It is wrong to contend that they paid the taxes under any mistake of law. The assessment orders have become final long before. The respondents also objected to the filing of a single writ petition for relief relating to several assessment years. Merely because for the year 1970-71 the petitioner was granted exemption it cannot ask for a declaration that the assessment orders which have become final are illegal or ask for the refund of the taxes without getting the assessment orders set aside by adopting remedies available under the Act which it failed to adopt and allowed the assessment orders to become final. Therefore, it is contended that no relief can be granted to the petitioners in these cases. In the view which we are taking in these cases on the merits of the petitions, we consider it unnecessary to determine the preliminary objections taken by the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tain rates. The High Court of Madras on a consideration of the material on record held that (1) there was a stipulation for consolidated lump sum payment of Rs. 1,160 per ton for fabricating, supplying and erecting at site all steel work, etc.; (2) there was no stipulation for passing of property in the goods to the factory before actual completion of the erection work; (3) that the contract did not contemplate dissecting the value of the goods supplied and the value of work and labour bestowed in the execution of the work; and (4) the predominant idea underlying the contract was the bestowing of special skill and labour by the experienced engineers and mechanics of the assessee. The Supreme Court agreed with the abovesaid view of the High Court and held that the contract was a works contract and not a contract for sale. One can therefore take it that the abovesaid factors considered by the Madras High Court in determining whether a contract is a works contract and approved by the Supreme Court are the tests which can be normally applied to find out whether a transaction is a works contract or not. Elaborating the second factor mentioned above, the Madras High Court in Richards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her hand, the main object of work undertaken by the payee of the price is not the transfer of the chattel qua chattel, the contract is one for work and labour. It is, however, made plain that it is not possible nor is it desirable to evolve any universal rule which would apply to all the cases. T.V.S. Iyengar Sons (P.) Ltd. v. State of Madras[1970] 25 S.T.C. 160. put the same thing in slightly a different manner. It was observed: "Where on a movable property supplied by a customer, a dealer does to or on it some work using his own material in the process, it has to be ascertained from the terms of the contract or the available evidence whether the parties intended delivery of a finished article as a specific chattel though fitted on to the customer's movable property. The test often to be applied to is when and how the property of the dealer in such a transaction with the materials used by him passes to the customer: is it by transfer at the time of delivery of the finished article as a chattel or by accession during the process of a work on affixture or fusion to the movable property of customer? If it is the former, it is a sale of goods; if it is the latter, it is a works co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in is that the object of the parties to the contracts was to supply the ballast of the required size as such and the services rendered in stacking are incidental to the execution of the contract of supply of ballast. The primary undertaking of the contractor was to supply the ballast and deliver them to the railway in a particular manner, that is to say, by scattering them according to the direction contained in the agreement. It is quite relevant to note that this stacking is not done by any skilled labour and is done under the supervision of the engineer of the railways and not of the contractor. It could not be doubted that the supply of ballast to the railways customarily or normally is made by stacking them on the railway lines. Such a stacking, therefore, is an incidental feature of the delivery of ballast. It is only when the ballasts are properly arranged that the delivery of the ballast on the site becomes possible. It is only after such delivery that the determination of price of the ballast, according to the measurement, is possible. It was a common case that the title in the ballast passes to the railway after such delivery. We are not at all impressed with the argume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... railways, there would not have arisen any question of passing the title in ballast to the railways. Cases of that kind, such as Vairakannu v. Assistant Commercial Tax Officer[1972] 29 S.T.C. 137. of the Madras High Court and Commissioner of Sales Tax v. Purshottam Premji[1970] 26 S.T.C. 38 (S.C.). of the Supreme Court, to which we were referred to, are not relevant for this case obviously because it is the contractor who continued to own the ballast until he delivered them to the railways and when the property in the ballast passed to the railways. We, for the reasons mentioned above, are satisfied that the agreements in question amount to sales of ballast and do not constitute works contracts. The contractor therefore was rightly assessed on the turnover of the supply of ballast. We are fortified in our view by the following decisions, Mooljee Ramjee Sons v. Deputy Commissioner (Commercial Taxes)[1966] 17 S.T.C. 255. , Seth Pamandas Sindhi v. State of Madhya Pradesh[1963] 14 S.T.C. 74., Chandra Bhan Gosain v. State of Orissa[1963] 14 S.T.C. 766.(S.C.). and Love v. Norman Wright (Builders) Ltd.[1944] 1 K.B. 484. We are not persuaded to agree with the decision of the Mysore Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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