A contract for the construction of a body on a motor chassis is a contract for the sale of goods and the body-building contractor is a dealer within the meaning of the Bombay Sales Tax Act, 1953.

DESAI, J. - Two questions have been referred to us by the Sales Tax Tribunal in this reference under section 34 of the Bombay Sales Tax Act of 1953, which are as follows :-

"1. Whether on the facts and in the circumstances of this case the applicants were dealers within the meaning of the Bombay Sales Tax Act, 1953, in respect of their activities as body-building contractors, and

2. Whether the transaction referred to in bill dated 29th June, 1955, is liable to the sales tax under the Bombay Sales Tax Act, 1953."

The applicants Messrs Mckenzies Limited execute engineering jobs such as building structures and body-building on motor chassis. They entered into a contract for the construction of 218 bodies with the Government of India. Under this contract the bodies were agreed to be supplied at the rate of Rs. 1,730 per body. In pursuance of this contract the applicant presented a bill for the five bodies supplied by them on the 29th June, 1956, for Rs. 8,650. Under section 27 of the Bombay Sales Tax Act of 1953 the applicant applied to the Collector for the determination of three questions : firstly, whether they were dealers within the meaning of that word as given in section 2(6) in relation to their activities as body-building contractors; secondly, whether the body-building contracts constituted sales and thirdly, whether the receipts from body-building contracts were liable to sales tax under the Act of 1953. All these three questions were answered by the Additional Collector of Sales Tax in the affirmative. Against the said decision, the applicant appealed to the Sales Tax Tribunal. The Tribunal took the view that the second of the three questions, being of a general nature, did not come within the scope of clause (b) of section 27 of the Act and should have been rejected by the Additional Collector of Sales Tax. The Tribunal accordingly set aside the answer given by the Additional Collector to that question. With regard to the other two questions, the Tribunal agreed with the decision of the Additional Collector of Sales Tax. At the instance of the applicant, it then referred the two questions, which we have already set out, under section 34 of the Act to this Court. The first question is with reference to the contracts of the applicant with the Government of Indian in respect of the building of bodies to motor chassis, which we have already referred of above. The view of the Tribunal was that looking to the terms of the contract between the parties, the intention of the parties was to sell and purchase manufactured motor-bodies. According to the Tribunal the contract between the parties was, therefore, a contract for the sale of goods and the applicants, therefore, were dealers within the meaning of the Bombay Sales Tax Act of 1953 in respect of their activities as body-building contractors in the contracts concerned. On the second question, the view of the Tribunal was that the transaction referred to in the bill of the applicants dated 29th June, 1956, being a transaction of sale of goods was liable to sales tax under the Bombay Sales Tax Act, 1953.

Mr. Donde, the learned Advocate, who appears for the applicants, has contended that the view taken by the Tribunal is erroneous. According to him the contract between the parties in the present case was not a contract for the sale of goods, but was a contract for construction, although the applicants as contractors were also to supply certain material for the construction undertaken by them. The material, which the contractors supplied for the construction work undertaken by them, did not pass on to the other party to the contract as sale of goods but as an accretion to the construction. Moreover he contended that the contract was one and indivisible and the amount agreed to be received by the contractors in respect of the work undertaken could not be split as in part for the material supplied and in part for the labour and work done. According to Mr. Donde, the pr