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TMI Blog1990 (8) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... ber of bricks. In the case of "jhama", it was per cubic metre. The petitioner submitted its returns of turnover showing the supply of bricks made to PWD in pursuance of the said contracts as "sales" and paid the tax due thereon under the Tripura Sales Tax Act, 1976 (hereinafter referred to as "the Act"). In regard to sales of "jhama", it was claimed that the same was not taxable and as such, no tax was paid in respect thereof. Assessments were made by the Superintendent of Taxes. In the said assessments, the Superintendent of Taxes did not accept the contention of the petitioner that "jhama" was not taxable and included the turnover of the same in the taxable turnover of the petitioner. He also did not allow deduction from the price of bricks charges incurred for carrying, loading, unloading, etc., as claimed by the petitioner. Aggrieved, the petitioner preferred appeals before the Assistant Commissioner of Taxes. Two contentions were raised. Firstly, it was contended that the part of the turnover that can be attributed to carriage, loading, unloading charges, etc., could not be termed as sale price of the bricks and, as such, should be deducted from the price for determination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks comprise of six items. The six items have been separately mentioned in the tender notice and the contract agreements. Against each item of work the quantity, rate, unit and amounts have been stated. Persons interested in execution of the works might submit tender in respect of one or more or all the items of the works. The department concerned had also the option to split up the work between two or more contractors or to accept it in part and not in entirety. Though the name of the contract is construction/improvement of roads specified therein, the six items of work for which tenders were called are completely independent items, some of which are purely job-works whereas the others appear to be for supply of materials. Since the various agreements are substantially similar, we may refer to agreement No. 16/SE/ 1978-79. The six items of work specified therein, so far as relevant, are reproduced below: "1. Preparation of sub-grade excavating earth to an aggregate of 22.5cm. depth dressing to camber and consolidation with road-roller including making good the undulation, etc., disposal of surplus earth lead up to 50 m. (a) Ordinary soil. 2.. Collection and stacking of overbu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s seventy-nine only)." ------------------------------------------------------------------------ On these facts it has to be determined whether the supply of bricks by the petitioner amounted to sale or not. If it is held to be a sale, the next question that has to be decided is whether in determination of the turnover for the purpose of levy of sales tax, any deduction has to be allowed on account of the supposed expenses incurred by the petitioner on account of carriage of bricks to the work site which was the place of delivery under the contract and for loading, unloading, stacking, etc. We may deal with the first question-whether the supply of bricks amounted to sale or works contract. Various tests have been laid down by the Supreme Court in a number of cases for determining when a contract can be said to be a contract for sale or a contract for work and labour. The primary test is whether the contract is one whose main object is transfer of property as a chattel to the buyer. If the main object of a contract is transfer of property as a chattel to the buyer, it will be a contract for sale even though some work may be required to be done under the contract as ancillary or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court, referring to the aforesaid three forms that works contract may generally take, observed that a contract for work to be done for remuneration and for supply of materials used in the execution of the work for a price is a composite contract consisting essentially of two contracts, one for the sale of goods and the other for the work and labour. Such contract is divisible and the contract for sale can be separated from the contract for work and Tabour and the amount payable under such composite contract can be apportioned between the two. Applying the primary test of transfer of property as chattels to the buyer, in Chandra Bhan Gosain v. State of Orissa [1963] 14 STC 766, the Supreme Court held that the assessee, a manufacturer of bricks, to whom land was given free for the manufacture and supply of bricks, was liable to pay sales tax on bricks delivered by him. In that connection, it was observed: "Here the intention of the parties in making the contract clearly was that the company would obtain delivery of the bricks to be made by the appellant; it was a contract for the transfer of chattels qua chattels. The essence of the contract was the delivery of the br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re are some well-recognised tests which are laid down by decided cases of this Court which afford guidelines for determining as to whether a contract in question is a works contract or a contract for supply of goods." The facts of the present case in the light of the aforesaid principles may now be considered. From a perusal of the agreements in the instant case, the various items of works and the terms and conditions, it is evident that there were six separate contracts or agreements for undertaking six different and distinct works-though they were all embodied in one single instrument. This also gets support from the fact that the parties in the instant case were free to submit tenders for one or more items. It was not necessary to undertake all the six items. Nor was it obligatory for the PWD to offer all the items to one person. Even one item could be sub-divided between more than one person. All these clearly go to show that the six items of works were really six agreements though there was a single agreement embodying them. That being the position, each item of work has to be examined independently. If that is done, there is no dispute that contracts in respect of items ..... X X X X Extracts X X X X X X X X Extracts X X X X
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