LexSTATE OF RAJASTHAN versus MAN INDUSTRIAL CORPORATION LTD.
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STATE OF RAJASTHAN
v.
MAN INDUSTRIAL CORPORATION LTD.
Februiuy 4, 1969
(J. C. SHAH, V. RAMASWAMI AND A. N. GROVER, JJ.)
Sales Tax--Contract for providing and fixing goods in building-Whe-
ther sale of goods or for rendering service.
The respondent, a fabricator of steel windows, submitted a tender for
'providing and fixing' window leaves in a building. The window leaves
were to be fabricated according to the specifications in the contract and
were to be fixed within six months from the date of acceptance to the
building with rnwl plugs in cut stone work. The rate quoted by the res-
pondent was based on the current price of mild steel billets and the price
was to be revised in the light elf cost revision of the controlled price of
steel.
The tender was accepted and the respondent carried out the con-
tract. The Sales Tax Officer levied sales
tax on the amount received
under the contract holding that the contract was for sale of goods and to
promote its sale the respondent undertook to fix the windows without de-
manding any charge for that service. ·But in appeal the Deputy Commis-
sioner &.cise & Taxation held that two contracts resulted : one for pro-
viding windows and the other for fixing them in the building, and that the
price of goods supplied, but not the charge for service was taxable. The
Board of Revenue confirmed the order passed by the Deputy Commis-
sioner observing that the contract wa~ not a contract of service. On refer-
ence, the High Court held that it was a building contract and amount re-
ceived was not taxabJe.
In appeal, this Court,
HElD : It was a contract for rendering service and the amount re-
ceived by the respondent was not taxable.
Whether a particular contract is for sale of goods or is a contract for
service depends upon the main object of the parties gathered from the
terms of the contract, the circumstances of the transaction, and the custom
elf the trade, and no universal rule applicable to all transactions can be
evolved. [509 Al
In this case, the primary undertaking of the respondent was not merely
to supply the windows but to 'ftx' the windows. This
service waa not
rendered under a separate contract, nor was shown to be rendered custo-
marily or normally as incidental to the sale by the person who supplied
window leaves. The fixing of the windows in the manner stipulated re-
quired special technical skill. If the windows were not properly 'fixed'
the contract would not be complete, and the respondent could not claim
the amount agreed to be paid to it. It was only upon the 'fixing' of the
window-leaves and when the window-leaves had
become a part of the
building construction that property in the goods passed under the terms
of the contract.
[512 E--GJ
The State of Madras v. Gannon Dunkerley & Co. (Madras) Ltd. 9·
S.T.C. 353; The Government of Andhra Pradesh v. Guntur Tobaccos Ltd.,
16 S.T.C. 240 (S.C.); Patnaik and Company v. State of Orissa, 16 S.T.C.
364 (S.C.); Mckenzies Ltd. v. The State of Maharashtra, 16 S.T.C. 518
(S.C.); Commissioner of Sales-tax, Maharashtra State, Bombay v.
Arun
506
SUPREME COURT REPORTS
[1969] 3 S.C.R.
Electrics, 16 S.T.C. 385; Arun Electrics, Bo1nbay v. Commissioner of Sales
A
Tux, Maharashtra State, 17 S.T.C. 576; The State of Madras v. Richardson
& Cruddas Ltd., 21 S.T.C. 245; Love v. Norman Wright (B11ilders) Ltd.,
{1944] I K.B. 484, referred to.
CIVIL APPELLATE JURISillCTION:
Civil Appeal No. 812 ()f
I 966.
Appeal by special leave from the judgment and order dated
B
May 13, 1965 of the Rajasthan High Court in D.B. Civil Ref. No.
I 8 of 1963.
M. C, Chagla and K. Baldev Mehta, for the appellants.
Sanpat P. Mehta, 0. P. Malhotra, J. B. Dadachanji and 0. C.
Mathur, for the respondent.
The Jmtgment of the Court was delivered by
Shah, J.
The respondent carries on the business of fabricating
"steel doors, windows, sashes and other goods".
On April 20,
1957, the resp<mdent -submitted in pursuance o! an invitation by
the Executive Engineer, Ajmer Central Division, its tender for
providing and fixing "S.H. Windows 'W' Type", "S.H. Windows
'WI' Type", "T.H. Windows" and "Composite Windows" of cer-
tain sizes "in accordance with the specifications, designs, draw-
ing and instructions". The tender was accepted and the respon-
dent carried out the contract.
The Sales Tax Officer 'B' Circle, Jaipur City included in the
taxable turnover of the respoodent Rs. 23,480/- recExcerpt shown. Read the full judgment & AI analysis in Lexace.