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TMI Blog1979 (5) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... nd cotton by the company, was part of the goods sold and that the pressing and baling charges recovered by the company from its customers included not only the labour charges for the work done but also the price of the packing materials, which was estimated by the assessing authority at Rs. 8 per bale. He, therefore, proceeded to charge sales tax on the estimated price of the packing materials. The order of the assessing authority was challenged by the company before the Deputy Commissioner, Commercial Taxes (Appeals), Ajmer and Kota Divisions, Jaipur, who, by a common order, accepted the appeals filed by the company for all the aforesaid years. The appellate authority was of the view that the transfer of the packing materials did not constitute a sale of property but formed an integral part of the contract for work and, as such, sales tax could not be charged on the estimated price of the goods used by the company as packing materials. The State of Rajasthan preferred revision petitions before the Board of Revenue, which were accepted, and the Board, by its order dated 11th June, 1968, set aside the orders passed by the appellate authority and restored the orders passed by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding and the ownership thereof vested in the owner and as such also there was no sale of goods. The decision of this Court in the aforesaid case was upheld by their Lordships of the Supreme Court in State of Rajasthan v. Nenu Ram[1970] 26 S.T.C. 268 (S.C.). and their Lordships held that the contract for supply and fixing of wooden windows and doors was one and indivisible and goods were not sold as movables and the property was to pass only when the wooden windows and doors were fixed at the site. Their Lordships also held that the amount charged by the contractor for the supplying and fixing of the wooden windows and doors at the site was not liable to payment of sales tax. Their Lordships referred to their earlier decision in State of Rajasthan v. Man Industrial Corporation Ltd.[1969] 24 S.T.C. 349 (S.C.)., wherein also a similar view was taken. In that case, their Lordships laid down the following tests: "The test in each case is whether the object of the party sought to be taxed is that the chattel as chattel passes to the other party and the services rendered in connection with the installation are under a separate contract or are incidental to the execution of the contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tar Pradesh(2), where there was a contract for fabrication and erection of a 3-motion electrical overhead travelling crane and it was held that it was a contract for work and labour and not a contract for sale. Their Lordships laid down the test in the following words: "The primary test is whether the contract is one whose main object is transfer of property in a chattel as a chattel to the buyer, though some work may be required to be done under the contract as ancillary or incidental to the sale or it is carrying out of work by bestowal of labour and service and materials are used in execution of such work." Their Lordships of the Supreme Court also quoted with approval the following observations made by them earlier in Commissioner of Sales Tax, Madhya Pradesh v. Purshottam Premji[1970] 26 S.T.C. 38 (S.C.).: "The primary difference between a contract for work or service and a con. tract for sale of goods is that in the former there is in the person performing work or rendering service no property in the thing produced as a whole.......... In the case of a contract for sale, the thing produced as a whole has individual existence as the sole property of the party who produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntegral part or independent of the goods, there cannot be any necessary inference that the goods were agreed to be sold and the price was liable to payment of sales tax. In order that there should be a sale of goods, which is liable to sales tax, as part of the contract for work under a statute enacted by the State Legislature, there must be a contract in which there is not merely transfer of title to the goods as an incident of the contract, but there must also be a contract, either express or implied, for the sale of the very goods and the parties must have intended to sell them for money consideration. Thus, there must be independent contracts or at least independent terms in the contract for work and for sale of goods by one party to the other, for money consideration, in order to constitute a sale of goods on which sales tax could be levied. In Government of Andhra Pradesh v. Guntur Tobaccos Limited[1965] 16 S.T.C. 240 (S.C.)., Shah, J., speaking for the majority of the Supreme Court, observed that a contract for work, in the execution of which goods are used, may take any one of the three forms, namely: (a) the contract may be for work to be done for remuneration and for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axmi Cotton Ginning and Pressing Factory's case(4) decided along with the Mewar Sugar Mills' case(4) and we do not consider it necessary to deal again with the aforesaid cases decided by the Madhya Pradesh High Court cited above. Another argument advanced by the learned Additional Government Advocate is that the company should have taken recourse to the ordinary remedy of filing an application before the Board of Revenue for making a reference to this Court and that this Court should have considered the matter only after the case would have been stated by the Board of Revenue by making a reference to this Court. His submission is that the company should not be allowed to by-pass and ignore the legal remedies provided for under the Rajasthan Sales Tax Act. However, this Court in the Mahalaxmi Cotton Ginning and Pressing Factory's case(4) decided along with the Mewar Sugar Mills' case(4) laid down that the use of iron hoops and hessian cloth for wrapping the pressed cotton bales in a pressing factory is an integral part of pressing cotton and the process of packing is incidental to the process of pressing and, as such, the transfer of title in the packing materials does not amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it may be the duty of the superior court to issue a writ of certiorari to correct the errors of an inferior court or tribunal called upon to exercise judicial or quasi-judicial functions and not to relegate the petitioner to other legal remedies available to him. If it is held that the Sales Tax Act itself does not authorise any such imposition and the law is not applicable to the circumstances of the case, the provision of a remedy by way of appeal under the Act cannot stand as a plea in bar." In L. Hirday Narain v. Income-tax Officer, Bareilly[1970] 78 I.T.R. 26 (S.C.); A.I.R. 1971 S.C. 33., and State of West Bengal v. North Adjai Coal Co.[1971] 27 S.T.C. 268 (S.C.); (1971) 1 S.C.C. 309., it was held by their Lordships of the Supreme Court that the High Court having entertained a writ petition and given a hearing on merits, it should not reject the writ petition on the ground that the petitioner has not availed of the statutory remedy. We are, therefore, not inclined to accept the contention of the learned Additional Government Advocate that these writ petitions should be dismissed merely on the ground of existence of an alternative remedy. In the result, we hold that the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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