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TMI Blog2018 (5) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal that the entire raw materials, including the land and electricity were supplied by the contractee to the respondent assessee. Therefore, we have no occasion to go into the validity of the findings by the Tribunal, which is after all the final fact-finding authority that the raw materials, besides electricity, have all been supplied by the contractee Department to the respondent assessee. There is a definite case for the respondent assessee that the tiles, which are subject matter of the controversy, have been supplied under a contract, which was executed in the year 1986. The respondent assessee was assessed to tax in respect of the tiles, which were supplied apparently under the same contract in the year 1986-87, but the said assessment was interfered with by the order passed by the Tribunal. The Tribunal apparently has proceeded to hold that the transaction is in the nature of a job work. It is true no doubt that the contract as such has not been made available, but in the light of the fact that the Tribunal has rendered a finding at any rate that all the materials, including land and electricity have been supplied by the contractee Department, we are of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided a lot of facilities to the dealer. He was of the view that it was but natural that the rate of the cement tiles was very less. The Assessing Officer relied on the judgments of the Hon ble Supreme Court in the case of M/s Chandra Bhan Gosain vs. State of Orissa reported in 1963 -14 STC 866, as also, in the case of Commissioner Sales Tax vs. M/s Sabarmati Udyog Sahkari Mandali reported in 1976 STI SC 119. It was found that the facts of the present case are similar to that of the said case as the Department had provided facilities of land, material, electricity etc. to the contractor, and the skill and labour was of the contractor. Price of the cement has been deducted from the bills of the contractor, but there is no reference to sand and gravel made in the certificates of deduction and payment filed by the dealer. It is evident that sand and gravel has been used by the contractors after purchasing it themselves. The respondent-dealer has obtained registration for manufacture and sale of tiles. He had prayed to convert the temporary registration to permanent registration. Temporary registration is given only to those dealers, who are manufacturers. The reason for the rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord. There is no dispute on this point that payment of ₹ 8,72,617/- in the Year 86-87 and of ₹ 18,98,008/- in the Year 87-88 has been made to the Dealer by the Contractee Superintending Engineer, East Ganga Canal Construction Division-3, Haridwar in respect of the work performed, under agreement no. 2 / East Ganga Canal Construction Division / Section -2/S.E./85-86. With regard to the payment received for the Year 86-87, vide order dated 22-2-1996 passed U/s 10-B by the learned Deputy Commissioner (Executive), Trade Tax, Muzaffarnagar tax has been assessed on the sale of self-manufactured comprest cement tiles, by holding the work of manufacture and supply of comprest cement tiles as executed by the Dealer in compliance of agreement no. 2 / East Ganga Canal Construction Division / Section -2 / S.E. / 85-86 made with M/s Superintending Engineer, East Ganga Canal Construction Division -3, Haridwar; and on imported empty cement bags against which the Dealer preferred Second Appeal No. 35 of 2006 (year 1986-87) before the Trade Tax Tribunal, Dehradun Bench and in the judgment / order dated 22-10-97 passed by the Division Bench of Trade Tax Tribunal, Dehradun after detailed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed by the Assessing Authority the imposed tax is set aside and the Dealer is declared exempted from tax. The amount got deposited by the Dealer along with returns, if not realised from the Contractee Department, be refunded to the Dealer as per Rules. 7. It is also relevant to notice the discussion in regard to the judgments of the Hon ble Apex Court, which we have referred to and which have been relied on by the Assessing Officer and the discussion, as found, is as follows: Therefore, as per the ruling given by the Hon ble Apex Court in the case of M/s Aysher Farma Machinery Ltd. vs. Commissioner, Sales Tax 1999 NTN-242 the judgment of Hon ble Trade Tax Tribunal in the matter of the Dealer relating to the year 86-87 is also applicable for the year 87-88. It was stated that with regard to the payment received for the Year 88- 89 the Dealer has been declared exempted from tax vide assessment order dated 15-3-1993. In the assessment order, the Assessing Authority has given reference of the judgments delivered by the Hon ble Apex Court in the cases of M/s Chandrabhan Goswami vs. State of Orissa (1963) 14 STC 866 and M/s Sabarmati Reta Udyog Sahkari Mandali Ltd. vs. Gujara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble Apex Court, is whether what is involved is only the supply of labour, and therefore, it is a job work or whether it is a contract of sale of goods, the tax is leviable under the U.P. Trade Tax Act, 1948 (hereinafter referred to as the Act) on the sale of goods. At once, necessary it is to notice Section 3-G of the Act. Form 3-D is contemplated under the provisions of Section 3-G. Sub-Section (1) of Section 3-G reads as follows: (1) Notwithstanding anything contained in Section 3-A or Section 3-D or Section 3-F, and subject to the provisions of sub-section (2), and such conditions and restrictions, if any, as may be specified by the State Government by notification, tax on the turnover of sales of goods to a department of the Central Government or of a State Government or to a Corporation or Undertaking, established or constituted by or under a Central Act or an Uttar Pradesh Act, or to a Government company as defined in Section 617 of the Companies Act, 1956 (not being a Nagar Nigam, Nagar Palika Parishad, Zila Panchayat, Nagar Panchayat, Cantonment Board, a University or an educational institution or an institution managed for the time being by an authorized controll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en its property and therefore, there could be no transfer of the property in them to it. The Court found that it may be presumed that it was in quoting the rate for the bricks, the appellant would take into account the free supply of earth for making the bricks. What was supplied by the Company was not the earth, which it got from it, but bricks, which were something entirely different found the Hon ble Apex Court. The Court also took note of the clause in the contract that the bricks would remain at the appellant s risk till delivery to the Company. The Court reasoned that the bricks could not remain at the appellant s risk, unless they were his property. There was another clause, which prevented the appellant from selling the bricks to other parties, without the permission of the Company. The Court construed this to mean that the property and the bricks belonged to him, as otherwise, this clause would not have been there. The tender condition provided that he would supply the material described in the memorandum. The memorandum described the material as bricks and also the quantity to be delivered and the rates were mentioned. This showed, according to the Hon ble Apex Court, tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be manufactured according to certain specifications, and, therefore, the appellant had to bestow a certain amount of skill and labour in the manufacture of the bricks, does not affect the question. That was not the essence of the contract. The object of the contract nonetheless remained the delivery of bricks. It has never been doubted that the claim of a tailor or a shoemaker is for the price of goods when delivered, and not for the work or labour bestowed by him in the fabrication of them : see Grafton v. Armitage and J. Marcel (Furriers) Ltd. v. Tapper. The present case, therefore, must a fortiori be one of sale of goods. 13. Now we may come to the later decision of the Hon ble Apex Court in the case of Commissioner Sales Tax vs. M/s Sabarmati Udyog Sahkari Mandali reported in (1976) 3 SCC 592. Therein also, a contract was entered with the Public Works Department by the assessee for manufacture and supply of kiln-burnt bricks for the construction of the project. The Hon ble Apex Court referred to the decision in M/s Chandra Bhan Gosain vs. State of Orissa reported in 1963 -14 STC 866 and further, several clauses in the contract were referred. It is necessary to refer to C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of supply etc. in the contract. 13. From the above extract, it is clear that the decision in Chandra Bhan Gosain's case (supra) will govern the present case where terms and conditions are almost identical so far as relating to the relevant subject-matter. 14. Mr. Desai, however, took pains to point out certain distinguishing features of the present case such as maintenance of qualified Executive Engineer for supervision of work subject to removal at the instance of the Government; restriction on employment of children under 12 years; labour welfare provisions regarding wages; workmen's compensation, etc.; provisions in relation to prevention of cruelty to animals; non-payment of royalty for excavating earth; use of tube-wells standing on the Government site; manner of execution of the work regarding moulding and drying and provision against subletting which shall constitute a breach of the contract resulting in forfeiture of security deposit. 15. The Court, thereafter, took the view that the terms do not appear to impinge on the character of the contract as one for sale of the bricks manufactured. The Government in its over all interest and anxiety for ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is in the nature of a job work. This order of the Tribunal was in fact challenged by the Department before the jurisdictional High Court. The jurisdictional High Court agreed with the Tribunal s view. While it may be true that it related to another assessment year, and it may not be fully correct to say that the principle of res judicata as such applies as every assessment year is a separate year when the vital fact, which is relevant for the subsequent year arises for consideration unless there is any change in the circumstances, which is brought to our notice, we have to give due importance to the findings by the Authorities in the earlier year. In this case, the contract was of the year 1986-87. It is in regard to the said assessment year, that finding has been rendered, which has become final that what is involved is only a job work and not a contract of sale of goods. We do not see, why the said principle should not hold good in respect of the tiles, which have been supplied in terms of the said contract for the year 1987-1988. It is true no doubt that the contract as such has not been made available, but in the light of the fact that the Tribunal has rendered a finding at an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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