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1 - 5 of 5 (0.19 seconds)Sentinel Rolling Shutters & ... vs Commissioner Of Sales Tax, Maharashtra on 12 September, 1978
In Sentinel Rolling Shutters & Engineering Company Pvt. Ltd. v. Commissioner of Sales Tax [1978] 42 STC 409, the question before the Supreme Court again was whether a contract for fabrication, supply and erection of certain types of rolling shutters was a contract of sale or a contract for work and labour. The Supreme Court analysed the nature of the contract and pointed out that "not only are the rolling shutters to be manufactured according to the specifications, designs, drawings and instructions provided in the contract, but they are also to be erected and installed at the premises of the company. The price stipulated in the contract is inclusive of erection and installation charges and the contract does not recognise any dichotomy between fabrication and supply of the rolling shutters and their erection and installation so far as the price is concerned. The erection and installation of the rolling shutters is as much an essential part of the contract as the fabrication and supply and it is only on the erection and installation of the rolling shutters that the contract would be fully executed." The Supreme Court then proceeded to examine what is a rolling shutter and how it is erected and installed in the premises and observed that a rolling shutter consists of several component parts and "the component parts do not constitute a rolling shutter until they are fixed and erected on the premises. It is only when the component parts are fixed on the premises and fitted into one another that they constitute a rolling shutter as a commercial article and till then they are merely component parts and cannot be said to constitute a rolling shutter. The erection and installation of the rolling shutter cannot, therefore, be said to be incidental to its manufacture and supply. It is a fundamental and integral part of the contract because without it the rolling shutter does not come into being. The manufacturer would undoubtedly be the owner of the component parts when he fabricates them, but at no stage does he become the owner of the rolling shutter as a unit so as to transfer the property in it to the customer. The rolling shutter comes into existence as a unit when the component parts are fixed in position on the premises and it becomes the property of the customer as soon as it come into being. There is no transfer of property in the rolling shutter by the manufacturer to the customer as a chattel. It is essentially a transaction for fabricating component parts and fixing them on the premises so as to constitute a rolling shutter." The contract for fabrication, supply and erection of the rolling shutters was, on this reasoning, held by the court to be a contract for work and labour and not contract for sale.
Vanguard Rolling Shuttersand Steel ... vs Commissioner Of Sales Tax, U.P on 8 March, 1977
In Vanguard Rolling Shutters & Steel Works v. Commissioner of Sales Tax , the assessee manufactured iron shutters according to specifications given by the parties and fixed the same at the premises of the customers. Under the terms of the contract the assessee was required to fabricate the rolling shutters, bring them to the site of the customers at the cost of the customers and thereafter erect them at the premises. The masonry work had to be done by the customers at their cost, according to the assessee's instructions. The assessee was entitled to receive full price of the shutters against delivery prior to despatch of documents by bank and there was no such thing as to make payment after fixing. The process involved in the fabrication of a rolling shutter and its actual fitting to the premises at the site was a continuous one and was completed only when erection was completed in every way. The price charged by the assessee from the owner of premises was one lump sum without at all specifying as to what part was meant for the materials used or fabricated and what part for the services or labour put in by the assessee. The High Court held that the contract entered into by the assessee was not a works contract but a contract for the supply of goods simpliciter and the assessee was, therefore, liable to pay tax. On appeal, the Supreme Court held that the contract was a works contract.
State Of Rajasthan vs Man Industrial Corporation Ltd on 4 February, 1969
In State of Rajasthan v. Man Industrial Corporation Ltd. [1969] 24 STC 349 (SC), pursuant to an invitation of the Executive Engineer, the assessee submitted its tender for fabricating and fixing certain windows in accordance with specifications, designs, drawing and instructions. The work was to be completed within six months from the date of its acceptance and the windows were to be fixed to the building with rawl plugs in cut stone-works. The rate quoted by the assessee was based on the current price of mild steel billets and the price was to be revised if there was 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 of Rs. 23,480 received under the contract could be included in the taxable turnover for the purpose of sales tax. The Supreme Court on consideration of the above facts, held 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 therefore held to be a contract for execution of work not involving sale of goods.
Ram Singh & Sons Eng. Works vs Commissioner Of Sales Tax, U.P on 7 December, 1978
In Ram Singh & Sons Engineering Works v. Commissioner of Sales Tax , a contract for fabrication and erection of a 3-motion electrical overhead travelling crane was held to be a contract for work and labour and not a contract for sale. To arrive at the above conclusion the Supreme Court considered what is a 3 motion electrical overhead travelling crane and how it is fabricated, erected and installed and following the analogy of its earlier decision in Sentinel Rolling Shutters & Engineering Company Pvt. Ltd. [1978] 42 STC 409 held that the contract was not a contract for sale but a contract for work and labour. It observed :
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