9911796707
TMI Blog1981 (1) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... he consideration to be paid is described at a particular rate for each unit. The contract entered into was in a standard form used for supply of goods for sale. The wheels and top rollers are manufactured and supplied by Messrs. Wheels India Limited to the Heavy Vehicles Factory at Avadi and the Central Vehicle Depot, Avadi, which are Government of India concerns. These wheels are intended for use in the construction of tanks for defence purposes. The wheels are delivered to the assessee for the purpose of rubberisation. The processes involved in rubberisation as given by the assessee are as follows: "The metal wheels are stacked in rows of fours outside in open and sprayed with salt water and allowed to weather. The weathered wheels are t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed invoices, claimed sales tax and recovered the same. The invoices specifically refer as sale of rubber. A certificate also was given by the assessee with reference to the amounts claimed as sales tax in the invoices to the effect that "the goods on which sales tax has been charged have not been exempted under the C.S.T. Act or the State Sales Tax Act or the Rules made thereunder and the amounts charged on account of sales tax on these goods are not more than what is payable under the provisions of the relevant Act or the Rules made thereunder and certified further that, We, Dunlop India Limited, 5, Pattullos Road, Madras-2, are registered dealers in the State of Madras under local registration No. TNGST. 43809 and Central registration No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Government of India. The property in the rubber portion or any of its components did not pass till the rubberised wheel as such is delivered to the Heavy Vehicles Factory. The wheel on which the rubber compound is settled or rubberisation is effected, belonged to the Government of India and the assessee had no right, title or interest in it. The entire risk until the goods are delivered to the Government of India or the Heavy Vehicles Factory or the Government of India's nominee is on the assessee. The form of contract is the one that is normally used for sale and purchase of the specified articles and it required the Government to pay sales tax. The property in the rubber compound portion in the wheel that passed on delivery, was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoking the theory of accretion. The Supreme Court also pointed out that it makes no difference whether an article is ready-made article or is prepared according to the customer's specifications as also whether the assessee prepares it separately from the thing and then fixes it on or does the preparation and the fixation simultaneously in one operation. If we apply the tests laid down in this judgment, we are of the view that it is not possible to hold that there was any works contract involved in this case. As already stated, the entirety of the materials used in rubberising the wheels belongs to the assessee. Neither the rubber compound nor any of the chemicals or other articles used ever belonged to the Government and the property in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . State of Madras[1975] 35 S.T.C. 24 (S.C.). In fact in one portion of the judgment, the Supreme Court pointed out with reference to the body after it was fitted to the chassis, as under: "If the property passes at delivery, what does that pass in? Is it movable property or immovable property? It will not be denied that the property passes in movable property. Then was this the very goods contracted for? Here again the answer is plainly in the affirmative." This passage clearly shows that the learned judges also treated the body built on the chassis as an accretion to the chassis. On the ground that it cannot be considered to be an immovable property, it was held to be movable. By reason of accretion of the rubberised portion, it cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C. 687., related to levy of sales tax on materials used during the course of repair to a motor vehicle. While holding that where a new part is supplied and fixed, the value of the turnover relating to the supply of new part is liable to sales tax, the Bench held that in case where. there is a fabrication of a part and that is fitted, those cases will have to be considered as works contract. The decision therefore depended on the facts in that particular case. Though there are certain observations which might be construed as helping the assessee, in view of the later categoric pronouncement made by the Supreme Court in T.V. Sundram Iyengar & Sons v. State of Madras[1975] 35 S.T.C. 24 (S.C.). and other cases it is not possible to accept the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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