9911796707
TMI Blog1983 (12) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... ,228 stating that the amount represented receipts for executing works contracts. All the authorities under the Sales Tax Act including the Appellate Tribunal rejected the claim 6f the petitioner and held that the transactions in question are contracts for sale and not for work. In the instant case, there is no written agreement. The question has to be adjudicated with reference to the correspondence between the parties. The disputed amount of Rs. 1,00,228 was received from six customers. The letters of indent and acceptance are similar in all the transactions. It would therefore suffice to refer to the correspondence in one case. "V.S. RAJU SONS, ENGINEERING WORKSHOP. Prop: V.S. RAJU. C.S.T. No. 1450. Morrispet, Tenali-2. R.C. GTT. I. 1305. 15-3-1974. To M/s. Kalpana Tanning Materials, Vizianagaram. Dear Sir, Quotation for second-hand Lancashire boiler No. C.P. 616 regarding. * * * I am glad to inform you that I can supply and erect the above Lancashire boiler rating 550 sft. working pressure 160 Ibs. p.s.i. with current certificate, with all mounting fittings, chimney of 60" x 30" dia., for Rs. 30,000 (Rupees thirty thousand only) including erection and commissioni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that erection is done as early as possible. You please arrange to get all the firebricks, seating blocks, fire cover and fire-clay. I agree for the condition of our agreement for payment and guarantee. Thanking you, Yours faithfully, Sd/-V.S. RAJU." The following facts emerge from the above correspondence: (1) As per the quotation, the appellant has to supply a loco boiler bearing the particular number and erect the same for an agreed price. (2) After the receipt of the quotation from the petitioner, the customer accepted the quotation and set out the terms and conditions of acceptance. (3) The receipt of letter of acceptance was confirmed by the appellant. The manner in which the work had to be executed has been explained to us in the following manner. After the boiler is reconditioned, it is loaded into a lorry or a trailer with the help of pully blocks and tripoles. The loading is done by experienced persons as it involves risk to human lives. The boiler has to be erected at the site, on a foundation which is designed and constructed on the guidelines provided in the Indian Boilers Regulations. A chimney has to be provided. The height of the chimney varies from 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a change in the controlled price of billets supplied to the assessee. The tender was accepted and the assessee carried out the contract. The question was whether the sum received under the contract could be included in the taxable turnover for the purpose of sales tax. It was held by the Supreme Court that the contract undertaken by the assessee was to prepare the window-leaves according to the specifications and to fix them to the building. There were not two contracts, one of sale and another of service. Fixing the windows to the building was also not incidental or subsidiary to the sale, but was an essential term of the contract. The window-leaves did not pass under the terms of the contract as window-leaves. Only on the fixing of the windows as stipulated could the contract be fully executed and the property in the windows passed on the completion of the work and not before. The contract was for execution of work not involving sale of goods. In Vanguard Rolling Shutters Steel Works v. Commissioner of Sales Tax [1977] 39 STC 372 (SC) the facts were that the assessee manufactured iron shutters according to specifications given by the parties and fixed the same at the prem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acturers and fabricators. They entered into a contract with a company for fabrication, supply, erection and installation of two rolling shutters in two sheds belonging to that company for a price which was inclusive of charges for "erection at site". The contract provided, among others, that the delivery of the goods was to be ex works and once the delivery was effected rejection claims would not be entertained. All masonry works required before and/or after erection was to be carried out by the company at its own cost. Payments were to be made on overall measurements which should be checked by the company before installation. The actual transportation charges were to be in addition to the price stipulated in the contract and the terms of payment provided "25 per cent advance, 65 per cent against delivery and remaining 10 per cent after completion of erection and handing over of shutters to the satisfaction" of the company. The assessee submitted the bill to the company after completion of the fabrication of the rolling shutters, but before they were erected and installed at the premises of the company. On the question whether the contract was a contract for sale or a contract fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indivisible process and the crane comes into existence only when the erection is complete. The erection is thus a fundamental and integral part of the contract, because without it the crane does not come into being. The manufacturer would be the owner of the component parts when he fabricated them, but at no stage does he become the owner of the crane as a unit so as to transfer the property in it to the customer. The crane comes into existence as a unit only when the component parts are fixed in position and erected at the site, but at that stage it becomes the property of the customer, because it is premanently embedded in the land belonging to the customer. The result is that as soon as the crane comes into being, it is the property of the customer and there is, therefore, no transfer of property in it by the manufacturer to the customer as a chattel. It is essentially a transaction for fabricating component parts and putting them together and erecting them at the site so as to constitute a 3-motion electrical overhead travelling crane." Bearing the principles enunciated in the aforesaid decisions, let us examine the facts of this case. After reconditioning the boilers it had ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
