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TMI Blog1973 (3) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... m the Executive Engineer, Salandi Dam Division, to the opposite party. Being aggrieved by the orders of the Tribunal annulling the assessment, the State of Orissa asked for a reference under section 24(1) of the Orissa Sales Tax Act, 1947 (hereinafter to be referred to as the Act). The Tribunal referred the following two questions to be answered by this court: "(1) Whether, on the facts and circumstances of the case, the Tribunal was right in accepting in evidence the letter dated 9th January, 1968, of the Executive Engineer, Salandi Irrigation Project, which was not produced before the assessing or the first appellate authority and which was specifically objected to on behalf of the applicant under rule 61 of the Orissa Sales Tax Rules, 1947, in the course of hearing of the second appeal? (2) Whether, on the facts and in the circumstances of the case, the contract in question is a works contract or is a contract for sale of chattels as such?" 2.. Before us, the letter dated 22nd June, 1965, which was not accepted by the Tribunal was filed, and the learned Advocate for the opposite party did not take any exception to the letter being looked into for determination of the point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng counsel, may be extracted: "Terms and conditions: (3) They are not allowed to sell any quarry produce to any private parties...................... (9) The rates are exclusive of sales tax. Royalty of Rs. 2 (Rupees two only) per 100 c.ft. (one hundred cubit feet) for all kinds of materials will be recovered from their bill." 6.. Whether the supply of materials by the opposite party constitutes a "sale of goods" or a mere works contract would depend upon the determination of the true character of the transaction. If the two quarries belong to the P.W.D., having ownership in the chips and stones, then the acts done by the opposite party merely constitute labour, and the transaction would be a works contract not exigible to sales tax. If, on the other hand, the title to the stone chips vested in the opposite party (hereinafter to be referred to as the contractor), then the supply of the materials would constitute a sale. The only feature for investigation in this case is, as to in whom the title to the chips and stones initially vested. 7.. Reliance is placed by the learned standing counsel on clause (9) of the agreement in support of the contention that though the quarries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10.. Bereft of authority, and purely on elementary analysis of the legal position, we are clearly of the opinion that the supply of materials by the contractor to the P.W.D. constituted a sale and was exigible to sales tax. The learned Tribunal's view that it was a pure works contract is contrary to law. 11.. The learned standing counsel placed reliance on Seth Pamandas Sindhi v. State of Madhya Pradesh[1963] 14 S.T.C. 74., Mooljee Ramjee v. Deputy Commissioner, Commercial Taxes[1966] 17 S.T.C. 255., Muthurama Reddiar v. State of Madras[1968] 22 S.T.C. 174. and Sahaj Ram Rehandmal v. Commissioner of Sales Tax[1969] 23 S.T.C. 109. Mr. Misra placed reliance on Commissioner of Sales Tax v. Purshottam Premjl[1970] 26 S.T.C. 38 (S.C.)., M. Ponnuswamy Udayar v. Government of Madras[1968] 22 S.T.C. 208. and Calcutta Co. Ltd. v. Commissioner of Sales Tax[1964] 15 S.T.C. 554. 12.. We now propose to discuss the authorities cited before us on either side. 13.. In Seth Pamandas Sindhi v. State of Madhya Pradesh[1963] 14 S.T.C. 74., the facts were as follows: The petitioner had taken several contracts for the supply of ballast to the railways. The Collectors of various districts ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain sum per 100 cubic feet of pebbles supplied. The contract stipulated that the assessee should pay the requisite seigniorage fee of thirty naye paise per unit of 100 c.ft. payable to the Government and that fee would be recovered from the assessee's bills for the quantity of pebbles collected and supplied by him. Their Lordships held that the transaction between the assessee and the Corporation was a sale as there was a specific stipulation for recovery from the assessee's bills of the seigniorage fee which the Corporation was liable to pay to the Government, the pebbles when removed from the earth became the property of the assessee, and were delivered to the Corporation at the agreed site as the property of the assessee. This decision In principle supports the contention of the learned standing counsel; but the correctness of this decision is open to doubt in view of the pronouncement of the Supreme Court in Commissioner of Sales Tax v. Purshottam Premji[1970] 26 S.T.C. as at 41 (S.C.)., wherein their Lordships explained such payment as being one by way of arrangement. In Commissioner of Sales Tax v. Purshottam Premji[1970] 26 S.T.C. as at 41 (S.C.)., their Lordships o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot assign or sub-let the lands or part thereof without the previous written sanction of the lessor. In the circumstances, the High Court of Madhya Pradesh rightly held that the supply of sand by the petitioner to the Project did not constitute sale, and was a works contract. This case renders no help to the contention of the opposite party that it did not acquire title to the chips and stones on payment of royalty. 18.. The last case on which reliance was placed by Mr. Misra is an unreported decision of this court in S.J.C. Nos. 53 to 63 of 1968 (M/s. Calcutta Co. Ltd. v. State of Orissa) disposed of by this very Bench on 27th October, 1971. In this case the dealer undertook job-work for operatIng quarries and breaking stones into chips. It entered into a contract with the Hindustan Steel Ltd. in 1956 for quarrying and extracting stones and for delivering stone aggregates according to specification. The quarry had been taken on lease by the Hindustan Steel Ltd. on payment of royalty to the State of Orissa. Initially, the petitioner was paying royalty to the Hindustan Steel Ltd., but the original contract was amended subsequently and the agreement was that the Hindustan Steel Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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