The main legal point established in the judgment is the distinction between a 'works contract' and a 'contract for sale', which depends on the terms of the contract, the nature of the obligations to be discharged thereunder, and the surrounding circumstances.

1. Petitioner has invoked the jurisdiction of this Court under Article 226 of the Constitution of India read with Section 103 of the Constitution of Jammu and Kashmir for quashing order dated 16th of June, 1998, passed by respondent-3, i.e., Deputy Commissioner, Sales Tax Department, Check Post, Lakhanpur, Jammu, whereby Air Conditioners, came to be seized and petitioner was directed to pay Sales Tax, while holding that the contract in question was a "works contract", and not a "contract for sale".

2. Precise case of the petitioner is that the petitioner is a Private Limited Company, registered under the Companies Act, and is manufacturer of Air Conditioners. In the course of its business, the petitioner had entered into a contract with Director General Supplies and Disposal (for short DGS&D) for its DGS&D Rate Contract vide No.ME-3/RC-4298/Split AC/03/97-98/Purisons/COAD/899 dated 23-10-1997 (for short DGS&D Rate Contract). As per the mandate of DGS&D Rate Contract, the Executive Engineer (E), Telecom Electric Division, Jammu, vide his supply order No.6/SO/97-98/2071-78 dated 20-10-1998, placed Supply Order for supply of Split-Type Room Air Conditioners to the petitioner Company at Delhi. After inspection, goods were delivered to M/s Nagpal Transport Service for its delivery in the office of Executive Engineer (E), Telecom Electric Division, Jammu, after Central Sales Tax was charged against Form-D. Respondent-3 at Lakhanpur detained the vehicle of M/s Nagpal Transport Service along with goods and asked the petitioner to pay local tax, i.e., Sales Tax under the Jammu & Kashmir General Sales Act, 1962. Petitioner was constrained to file an application and, accordingly, impugned order came to be passed.

3. Petitioner could not file appeal in terms of mandate of Section 11 of the (Unamended) Jammu & Kashmir General Sales Tax Act, 1962, for the reasons that appeal could have been preferred before the Special Tribunal, but composition of Special Tribunal had not started at that point of time. The main challenge to the impugned order is that contract/supply order is a contract for sale and not a works contract.

4. Respondents have filed reply and resisted the petition on the grounds taken in the reply, which can be aptly summarized as under:

5. That petitioner had efficacious remedy available in terms of the Jammu & Kashmir Sales Tax Act, 1962, which he has not availed and thus, writ petition is not maintainable. Contract/supply order is not a contract for sale but a works contract and it is not correct that the petitioner had delivered the goods to the Executive Engineer (E), Telecom Electric Division, Jammu. In fact, the sale was not complete because the petitioner had to install Air Conditioners at Jammu in the premises of the purchaser, i.e., the Executive Engineer (E), Telecom Electric Division, Jammu.

6. Learned counsel for the parties addressed arguments while keeping in view the stand taking by them in the writ petition as also in their reply.

The following two points need to be considered:

(i) Whether the petitioner had an efficacious remedy available;

(ii) Whether the contract/supply order is a "works contract" or "contract for sale".

7. The decision on these points would clinch the issue. The argument of Mr. Naik that in terms of the provisions of Section 11 of Jammu & Kashmir General Sales Tax Act, 1962, the petitioner could have filed an appeal before the Tribunal, is devoid of any force, for the following reasons:

8. When the impugned order came to be passed, at that relevant point of time, any order passed by Deputy Commissioner or by the Commissioner was appealable before Tribunal and, thereafter, in terms of amendment, which came to be introduced in 2001, against an order passed by the Deputy Commissioner, an appeal may be preferred by the petitioner before the Commissioner. But this law was not in force at the relevant point of time, as discussed above.

9. Thus, the petitioner could have also filed an appeal before Tribunal.

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