The distinction between a works contract for work and labour and a contract for the sale of goods is that in a works contract, the predominant intention of the parties is the performance or carrying out of certain works, while in a contract for the sale of goods, the predominant intention of the parties is the transfer of ownership of the goods from the seller to the buyer.

RAMAMURTI, J.

The petitioner in the tax revision case is Richardson and Cruddas Ltd., a limited liability company, carrying on business in structural engineering work, and as contractors at the First Line Bench, Madras. It is admitted that in the course of its business the petitioner-company fabricates and erects heavy steel structures on behalf of its customers in connection with the construction of sugar factories, etc. It is also admitted that in the course of its business the petitioner-company receives order for the manufacture, fabrication and installation of cooling apparatus, like air coolers, bottle coolers, which are specially manufactured according to the special requirements and specifications of the customers and installed in the latter's premises by the use of skill and labour bestowed by experienced mechanics and specialists engineers of the petitioner-company.

In this revision petition, which relates to the assessment year 1957-58, the dispute relates to three items. The first item is with regard to the turnover of a sum of Rs. 3, 26, 075.20 nP. received from its customers, Pandavapura Sahakara Sakhare Karkhane Ltd. (hereinafter called the sugar factory), for the fabrication, supply and erection of steel structures at the site of the sugar factory in Pandavapura, Mysore State, according to the written contract which was entered into between the sugar factory and the petitioner. The objection of the petitioner is that this item represents moneys received in respect of a "works contract" entered into between the petitioner, and its customer, the sugar factory, while the contention of the State is that it represents the price paid for the goods sold by the petitioner-company. The question for determination is whether the turnover in question relates to a works contract or a contract for the sale of goods.The second item relates to a sum of Rs. 43, 349-05 nP. representing payments received from the customers by the petitioner, for the manufacture and installation of bottle coolers as per the special orders placed by the customers for the purpose. Here again the point in issue is whether the contracts in question are "works contracts" or contracts for the sale of goods.

The third item relates to a sum of Rs. 9, 27

3.70 nP., representing sales tax collected by the petitioner from its customers. The contention of the petitioner on this matter is that even though the amendment came on 16th November, 1957, in the middle of the assessment year, the amendment should apply for the entire year both before and after the amendment came into force, while the contention of the State is that the petitioner can have the benefit of the amendment only in respect of the turnover subsequent to the date of the amendment, that is, 16th November, 1957.

It may be mentioned at the outset that in respect of the first item a petition for enhancement was filed by the State before the Tribunal, and the Tribunal enhanced the turnover by Rs. 3, 26, 075.20 nP. holding that the contract in question was not a "work contract," reversing the finding of the Appellate Assistant Commissioner. With regard to the other two items, items 2 and 3, the Tribunal affirmed the findings of the Appellate Assistant Commissioner.

We shall first take up the first item in dispute, Rs. 3, 26, 075.20 nP. The Tribunal has disposed of this aspect of the case in a very summary and mechanical manner by simply referring to some cases without making any effort to understand the principles decided therein, and how far they are applicable to the facts of the instant case. The principles and the tests for determining whether a contract is a "works contract" for work and labour or whether it is a contract for the sale of goods are now well-settled by a series of decisions, both in England and in India. The problem is only the application of the principles to any particular case. In some cases the real character of the contract can be easily ascertained by the application o