ISMAIL, J.

These two revision petitions have been preferred by the revenue against the orders of the Sales Tax Appellate Tribunal (Additional Bench), Coimbatore, dated 6th July, 1970, made in Coimbatore Tribunal Appeals Nos. 857/1965-66 and 958/1964-65 of 1968. Both the appeals were disposed of together by the Tribunal and the point arising is the same in two successive years.

The respondent-assessees are Messrs. Sri Ram Cotton Pressing Factory (Private) Ltd. engaged in the business of pressing cotton waste. In the course of their business they had purchased hessian cloth and hoop iron to the extent of Rs. 31, 643.18 in 1964-65 and Rs. 7, 701 in 1965-66 and utilised the same in the packing of cotton waste pressed by them, which were given to them for such pressing by their customers. The assessing authority considered that the respondents had sold hessian cloth and hoop iron used in packing the cotton waste to the respective customers. Since the respondents had not maintained separate accounts in respect of the alleged sale of hessian cloth and hoop iron, the assessing authority arrived at the sale price of these materials for the two years in question by adding 10 per cent. profit to the cost price and assessed the same to sales tax. The objection of the respondents to the assessment of the said amounts on the ground that there was no sale of hessian cloth and hoop iron by the respondents to their customers was overruled by the assessing authority. The appeals preferred by the respondents to the appellate authority proved unsuccessful. However, when the respondents preferred second appeals to the Sales Tax Appellate Tribunal, the Tribunal by its impugned orders allowed the appeals holding that the contract entered into by the respondents with their customers was only a works contract or labour contract which did not include any implied agreement to sell hessian cloth or hoop iron and that, therefore, the amounts in question could not be assessed to sale tax. It is the correctness of this conclusion of the Tribunal that is challenged in these revision petitions before this court.We shall refer to the following admitted facts :

(1) There were no accounts maintained by the respondents showing the sales of these hessian cloth and hoop iron. (2) The hessian cloth and hoop iron purchased by the respondents were admittedly used in packing the pressed cotton when delivering them to their customers. (3) The Appellate Assistant Commissioner in the course of his order pointed out that the respondents were found to have charged the value of hoop iron and hessian cloth, etc., supplied by them and that it was indicative of the fact that there was an implied contract for the supply of materials. However, the Sales Tax Appellate Tribunal in its impugned order pointed out that it had perused the bills produced by the respondents, but it did not find any indication that any charge as such was made for the supply of those materials and the correctness of this finding of the Tribunal was not challenged before us. (4) There were cases in which the customers themselves brought their hessian cloth and hoop iron which the respondents used in packing the pressed cotton, when delivering them to them after pressing. In other cases, the respondents utilised their own hessian cloth and hoop iron for packing cotton waste, after the same had been pressed. It is against the background of the above-admitted position that we have to consider the question as to whether the Tribunal was right in holding that there was no sale of hessian cloth and hoop iron by the respondents to their customers so as to attract liability to sales tax under the provisions of the Tamil Nadu General Sales Tax Act, 1959.

It is well-settled that in the case of a works contract or labour contract, if the person entering into such contract has to supply certain materials incidental to the execution of that contract, the said supply will not constitute a sale of those materials