Judgment

FAZAL ALI, J. - This is an appeal by special leave by the assesee who was a contractor dealing in fabrication of Vanguard rolling shutters and steel works. The assessee manufactures iron shutters according to specifications given by the parties and fixes the same at the premises of the customers. In the assessment year 1965-66 the assessee received an aggregate sum of Rs. 1,08,633-08 in the execution of such contracts. This amount was claimed by the assessee as not being liable to sales tax during the assessment year 1965-66 on the ground that the same represented the proceeds of work contracts. The Sales Tax Officer rejected the plea of the assessee and the Assistant Commissioner (Judicial) on appeal also affirmed the order of the Sales Tax Officers. But the plea of the assessee appears to have found favour with the Judge (Revisions) Sales Tax who decided that the amount was not exigible to sales tax, because the contracts in question were work contracts. Thereafter at the instance of the Commissioner, the Revising Authority made a reference to the High Court and referred the following question of law for its opinion :-

"Whether under the circumstances of the case and under the terms of the contract the supply of shutters and iron gates worth Rs. 1,08,633-08 was sale or amounted to work contract?"

The High Court, after hearing the parties and considering the materials on the record, came to the conclusion that the contract entered into by the appellant was not a work contract but a contract for the supply of goods simpliciter and the assessee was, therefore, liable to pay tax. The question referred to the High Court was answered accordingly.

2. The assessees case as that having regard to the circumstances of the present case, the terms and conditions of the contract and the nature of the work done by the appellant the contract in question was out and out a work contract and not a contract for supply of goods or materials. In order to decide this question it may be necessary first to give the salient features of the contract between the parties. A specimen of the contract has been filed by the assessee as Annexure A in the Paper Book, the relevant portions of which may be extracted thus.

"Please erect at our premises...... Nos. of...... of the following dimensions against the contract price of Rs.....

1. Full payment against delivery prior to despatch or documents by Bank. It is clearly understood that there will be no such thing as to make payment after fixing.

2. Material will be carried to the site of woke at cost of the party. Our responsibility ceases when the same leaves our premises.

3. x x x x

4. We do not hold ourselves responsible for any structural damage or dispute with the landlord. Masonry work done by the praty at his cost according to our instructions.

5. x x x x

6. No responsibilities for non-delivery or late dispatch of goods due to any reason beyond our control".

It would appear from the terms extracted above, that the assessee was required under the contract to fabricate the rolling shutters in the first instance, to bring them to the site and thereafter to erect the same at the premises. In an application given to the Assistant Commissioner (Judicial), which is Annex. C of the Paper Book, by the assessee he explains the various steps which the contractor had to take in order to fix the rolling shutters to the factory premises of the owner. First the different parts and components of the rolling shutters are fabricated. It is only when the various component parts are fitted into one that they constitute the rolling shutter as one unit, and taken separately they have no separate existence. It was further explained that the component parts do not constitute a rolling shutter unless they are affixed to and erected in the building in position and in the required manner. It was further alleged that the contract was not concluded merely by delivery of fabricated materials but was completed only after the same were t