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TMI Blog1979 (6) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... words, for the ballasting of the railway track. According to the terms of the contract, the assessee was required to supply and stack specified quantity of ballast at different points, i.e., near each telegraph post alongside of the length of the railway line in Gadag section as specified in the contract. Under the terms of the contract, he was entitled to different rates as specified for the delivery of ballast at different points. His turnover for the supply of ballast under such contract was brought to tax, by separate assessment orders made for the assessment years 1962-63, 1963-64, 1964-65 and 1965-66, by the Commercial Tax Officer, Gadag. Thereafter, the assessee made an application before the assessing officer under rule 38 of the Karnataka Sales Tax Rules, 1957, for rectification of the assessment orders and to exempt the entire amount treated as sales turnover by holding that supplying and stacking of ballast did not amount to sale but was a works contract. The cause for making the application was the judgment of this Court in Stage of Mysore v. S.R. Bhide[1969] 24 S.T.C. 446; (1968) 2 Mys. L.J. 557., in which it was held that a contract for collection and training out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act and not a mere sale of ballast. He did not dispute that the work of stacking of ballast entrusted to the petitioner only consisted of arranging the heaps of ballast in the required size and shape at each delivery point but, however, contended that such work also amounts to training out operation as explained in Bhide's case[1969] 24 S.T.C. 446; (1968) 2 Mys. L.J. 557. and, therefore, the same was works contract not liable to be taxed under the Act. In support of his contention, he relied on the decisions of the Supreme Court in Ram Singh Sons Engineering Works v. Commissioner of Sales Tax, U.P.[1979] 43 S.T.C. 195 (S.C.); A.I.R. 1979 S.C. 545. , Sentinel Rolling Shutters Engineering Co. (P.) Ltd. v. Commissioner of Sales Tax, Maharashtra[1978] 42 S.T.C. 409 (S.C.); A.I.R. 1978 S.C. 1747. and State of Rajasthan v. M.I. Corporation[1969] 24 S.T.C. 349 (S.C.); A.I.R. 1969 S.C. 1245. 4.. Sri S.G. Doddakalegowda, the learned Government Advocate, appearing for the department, contended that the transaction of the assessee was only sale of ballast to the railway department and the mere requirement of stacking specified quantity of ballast, at the specified points, did not in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the years 1962-63, 1963-64 and 1964-65, and although the word "training out" was used in the work entrusted during the year 1965-66, as held by the Deputy Commissioner, the work was the same as in the previous years. As stated earlier, this position is also not controverted by the learned counsel for the petitioner. As rightly observed by the Appellate Tribunal, stacking was only meant for enabling easy measurement of the quantity of ballast supplied. The petitioner was not entrusted with any other work, such as spreading and consolidating ballast on the railway track, which means "ballasting". In Bhide's case[1969] 24 S.T.C. 446; (1968) 2 Mys. L.J. 557., it was held that the work entrusted to him was "training out" of ballast and not mere stacking. Therefore, the said decision must be confined to the facts of that case and cannot be applied to cases like the present, where the nature of work entrusted was only "stacking" and not "training out". Hence the only question that requires consideration in these cases, as specifically stated in the question referred to the Full Bench, is as to whether the condition that the ballast supplied should be stacked amounts to works contract. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omponent parts and cannot be said to constitute a rolling shutter. The erection and installation of the rolling shutter cannot, therefore, be said to be incidental to its manufacture and supply. It is a fundamental and integral part of the contract because without it the rolling shutter does not come into being." Similarly, in the case of M.I. Corporation[1969] 24 S.T.C. 349 (S.C.); A.I.R. 1969 S.C. 1245., it was a contract for the manufacture, supply and fixing of windows in building, and not a contract for mere supply of windows. The Supreme Court held that it was a contract for work. The relevant observations made read thus: "15. In the present case, the specifications of the windows were set out in the contract. The primary undertaking of the respondent was not merely to supply the windows but to 'fix' the windows. This service is not rendered under a separate contract, nor is the service shown to be rendered customarily or normally as incidental to the sale by the person who supplied the window-leaves. The 'fixing' of windows in the manner stipulated required special technical skill. If the windows were not properly fixed, the contract would not be complete, and the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these cases. The essence of the contract in these cases was to supply ballast, instead of bricks as in that case. But by the mere fact that ballast were required to be stacked, the contract does not get converted into a works contract. Though some labour is involved in stacking, it is part of or ancillary to the act of delivery, just as the labour involved in measuring, weighing or continuing, as the case may be, of goods sold before delivery to the buyer. The Andhra Pradesh High Court in the case of Anamolu Seshagiri Rao[1973] 32 S.T.C. 51. held that a contract for supplying and stacking of ballast amounts to sale, mainly relying upon the decision of the Supreme Court in Chandra Bhan Gosain's case(4). The facts of that case are exactly similar to the facts of these cases. Their Lordships expressed disagreement with the decision of this Court in Bhide's case[1969] 24 S.T.C. 446; As pointed out earlier, Bhide's case(6) turned on the finding that the contract was for training out ballast and not merely for stacking the ballast. Therefore, it is sufficient to state that Bhide's case(6) does not govern cases as the present one, where the contract is only for stacking ballast. 7.. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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