JUDGMENT

SABYASACHI MUKHARJI, J. :— These appeals by special leave are from the judgment and decision of the High Court of Karnataka dated 1st December, 1976 involving the questions of assessability of the appellant to Sales Tax, Central as well as State. While granting leave, this Court excluded the question whether the sales effected in the canteen by the appellant were assessable to Sales Tax. By the impugned judgment, the High Court of Karnataka had dismissed several Writ Petitions against several orders being S. T. R. Ps. Nos. 28, 27 and 29 of 1975 under the Karnataka Sales Tax Act, for the years 1960-61, 1961-62 and 1962-63 respectively and also three others namely, S.T.R.Ps. Nos. 25,26 and 24 of 1975, under the Central Sales Tax Act for the corresponding years respectively, at the instance of the present appellant. These involved common questions of law and facts and were disposed of by a common judgment. We also propose to do the same. As stated, one of the questions was about the taxability of the turnover in respect of the sales made in the canteen of the appellant company. This question is not before us. Before the Tribunal, the two following questions relevant for appeals before us were agitated namely;

(i) Whether the turnover apportioned from the job works undertaken by the appellant related to the sales of materials by the appellant to the Indian Air Force or other private parties, as the case may be, and as such whether these were taxable as held by the lower appellate authority.

(ii) Whether, in the case of job works undertaken from the private parties mainly on quotation on inclusive-price-basis, the Sales Tax authorities were right in apportioning a portion of the turnover as attributable towards sales of materials.

2. In order to appreciate the controversy in these appeals, it is necessary to state certain facts. The appellant is a manufacturer of spare parts and accessories of various aircrafts and has also established facilities for assembling, servicing, repairing, overhauling of aircrafts, their instruments and accessories. The Sales Tax Authorities sought to subject to tax that proportion of the total turnover of the appellant for the relevant years in question which was equivalent to the money value of the spare parts to the aircrafts which the appellant supplied to the Indian Air Force as a result of their use in the process of repairing, servicing and overhauling of the aircrafts, their instruments and accessories which were sent to the appellant for the aforesaid purposes during the relevant years in question.

3. At the outset, it is important to emphasise that the jobs done by the appellant were servicing, assembling, repairing and overhauling Air Force Planes entrusted to the appellant. In the second appeal being Civil Appeal No. 1387 (NT) of 1977, the main job done was assembling; sales tax was levied in respect of the turnover for doing the same job. These works were done on the basis of contracts or job orders issued from time to time. While no contract directly concerning the repairing, servicing and overhauling of a specified air- craft, instrument or accessory in which the spare parts had been used in the execution of service contracts was on record, there is, however, a specimen contract that was entered into between the appellant and I. A. F. being agreement dated 23rd June, 1951, hereinafter referred to as 1951 Contract. The agreement is described as "Contract for the flight servicing and maintenance of the H. Q. Training Command I. A. F. Communication Flight". The agreement was between Hindustan Aircraft Limited, described in the agreement as the Contractor and the President of India, described in the agreement as the Owner. It may be mentioned that the Hindustan Aircraft Limited has later on become the appellant i.e. M/s. Hindustan Aeronauties Limited. As the contentions of the parties on these appeals centered on the question whether the contracts in question, the income of which has been