Law: Sales Tax Act, (III of 1951)

Section: 2,2(15),3(1)(a)

[Sales Tax Act, 1951 (III of 1951)]......Sections 2(15), 3(1)(a)-Manufacturer-Assessee engaged in building body on chassis supplied by customer-Liability to sales tax-Contract of sale of goods and contract for work and labour--Distinction explained-Word "sale" meaning of-Sales of Goods Act, 1930, Sec. 2(7). The only question raised is whether building a body on a chassis supplied by a consumer is a sale falling within the ambit of Section 3(1)(b) of the Sales Tax Act or is it a "contract for work" resulting in 'accretion or accession' to the property of the customer, without entailing in any way 'sale of goods' to him ?. A contract of sale of goods is distinguished from a contract for work and labour. The distinction is often a fine one and opinions have differed much as to the test for distinguishing between these two contracts. The general rule in English Law seems to be that if the contract is intended to result in transferring for a price from A to B an article in which B had no previous property, it is a contract of sale (See Chalmers' Sale of Goods Act, 1893, 13th Edition, page 6). Where the main object of work undertaken by the payee of the price is not the transfer of a chattel qua chattel, the contract is one for work and labour (See Halsbury's Laws of England, 2nd End. Vol. 29, para. ll page 14). Another view is that if the substance of the contract is the production of something to be sold as a chattel, then that is a sale of goods. But if the substance of the contract is that skill and labour have to be exercised for the production of the article and that it is only ancillary to that there will pass from the producer to his client some materials in addition to the skill involved, the substance of the contract is skill and it will not be a sale of goods. In the light of the various views of the Courts, the following guidelines are laid down to ascertain if it is a contract of sale or for work and labour :- (i) to begin with the Court must go through the agreement. If it involves supply of movables for money consideration irrespective of the fact that those movables are to be used in raising a building by the seller, the contract is of sale of goods ;…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492