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TMI Blog1995 (3) TMI 452X X X X Extracts X X X X X X X X Extracts X X X X ..... ins with the capacity of 15.5 kgs. nett and fill up the tins with palm oil and supply the same to the customers as per the instructions by the State Trading Corporation. The company would be paid tinning charges including costs of the tins at the rate of Rs. 1,050 per metric tonne. The department considered that in so far as the tins are concerned, the assessee sold the tins to the State Trading Corporation and, therefore, the sale turnover of tins is liable to be taxed under the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as "the Act"). Accordingly the assessing officer taxed the sale turnover of the tins. Since the assessee did not disclose the sale turnover relating to tins, the assessing officer levied penalty of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the parties is discernible and the sale value of the tins would be liable to be taxed under the Act. Learned Additional Government Pleader further submitted that the sale value was reimbursed by the State Trading Corporation, and it would amount to sale of tins by the assessee to the State Trading Corporation. Relying upon the decision reported in the case of Government of Andhra Pradesh v. Guntur Tobaccos Ltd. [1965] 16 STC 240 (SC), the learned Additional Government Pleader (Taxes) submitted that the supply of materials used in the execution of the works is for a price in the present case. Therefore, the sale value of the tins is taxable under the Act. Therefore, according to the learned Additional Government Pleader (Taxes) the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. There is no sale involved in the present case while the oil was filled in the tins procured by the assessee and transporting the same to the customers of the State Trading Corporation. According to the learned counsel, since the contract entered into between the State Trading Corporation and the assessee is a works contract, there is no element of sale involved in it. It was, therefore, submitted that the Tribunal was correct in deleting the addition made by the authorities below in respect of the sale value of the tins. 4.. We have heard the rival submissions. The fact remains that the State Trading Corporation entered into an agreement with the assessee. According to the said agreement the assessee should procure the tins and fill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the attendant circumstances. But from the mere passing of title to goods either as integral part of or independent of goods it cannot be inferred that the goods were agreed to be sold, and the price is liable to sales tax." Similar question came up for consideration before the Gujarat High Court in the case of A.A. Jariwala and Bros. v. State of Gujarat [1965] 16 STC 942. According to the facts arising from this case "the customers sent saris to the applicants for getting embroidery work on the saris with instructions regarding the designs required on those saris. The assessee gave the jari materials and the saris to the workers doing the job work in their own houses and gave them piece rates according to the work done by them. After co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n waste pressed by them. The assessing authority came to the conclusion that the assessee had sold hessian cloth and hoop iron used in packing the cotton waste to the respective customers and assessed them to sales tax on an amount made up of the cost price of the articles plus ten per cent profit. While considering this aspect, this Court has held as under: "that the contract, which the assessee entered into with their customers, was principally a works contract and as incidental to the execution of the works contract, the assessee had used hoop iron and hessian cloth as packing materials. There was no express contract for the sale of the packing materials and it was for the department to show that there was an implied contract for the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature of the work, if otherwise it was an indivisible 'works contract'." Therefore, ultimately, whether a contract is a works contract or a composite agreement, depends upon the facts arising in each case. According to the facts arising in the present case as per the agreement between the parties, the State Trading Corporation directed the assessee to procure the tins for the purpose of filling them with oil and the State Trading Corporation undertook to pay the tinning charges including the costs of tins at the rate of Rs. 1,050 per metric tonne. It remains to be seen that the assessee is not a dealer in tins when the tins were purchased; they were purchased in accordance with the requests made by the State Trading Corporation. There was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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