Skip to content


Natabar Mohanty Vs. State of Orissa - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtOrissa High Court
Decided On
Case NumberS.J.C. No. 71 of 1968
Judge
Reported in[1971]27STC572(Orissa)
AppellantNatabar Mohanty
RespondentState of Orissa
Appellant AdvocateB.K. Mohanty, Adv.
Respondent AdvocateS.C. Mohapatra, Standing Counsel
Excerpt:
.....on a perusal thereof we are satisfied that the agreement was for repair of the road and as an integral part of that agreement the dealer was to supply hard granite chips......agreements could be executed with different parties. for instance contractor 'x' could be asked to supply granite chips and another contractor 'y' could be asked to do the repair work by using those chips. doubtless, in such a case the supply by 'x' would constitute a sale. the confusion into which the tribunal fell is in invoking a case of separate contract in its application to the present agreement. it was the duty of the tribunal to examine the nature of the contract and see whether it was indivisible or not. the contract, as we have said, was indivisible and accordingly there was no agreement for sale of movables separately.3. on the aforesaid analysis, we would answer the question in the negative.4. the reference is accepted, but in the circumstances there will be no order as to.....
Judgment:

G.K. Misra, C.J.

1. The petitioner is a contractor under the Public Works Department. During the quarter ending 30th September, 1960, he executed certain contracts for repair of roads. In the agreement, there was a term that the contractor would supply black hard granite chips for repair of road. The assessing authorities right up to the Tribunal held that the contract was divisible and that the dealer was assessable to sales tax in respect of supply of hard granite chips. A reference was asked for under Section 24(1) of the Orissa Sales Tax Act, but the same was rejected. The dealer approached this court praying that, a reference be called for. After hearing, this court directed the Tribunal to state a case and refer the following question:

Whether in the facts and circumstances of the case, supply of materials constituted 'sale' within the meaning of Section 2(g) of the Orissa Sales Tax Act.

Accordingly, the Tribunal has stated a case and referred the aforesaid question.

2. The Tribunal has, in its order of reference, quoted the relevant terms of the agreement. On a perusal thereof we are satisfied that the agreement was for repair of the road and as an integral part of that agreement the dealer was to supply hard granite chips. The agreement is indivisible and there was no agreement for sale of granite chips separately. Accordingly, there was no 'sale' within the meaning of that expression in Section 2(g) of the Orissa Sales Tax Act. The Tribunal fell into a confusion in holding that similar separate agreements could be executed with different parties. For instance contractor 'X' could be asked to supply granite chips and another contractor 'Y' could be asked to do the repair work by using those chips. Doubtless, in such a case the supply by 'X' would constitute a sale. The confusion into which the Tribunal fell is in invoking a case of separate contract in its application to the present agreement. It was the duty of the Tribunal to examine the nature of the contract and see whether it was indivisible or not. The contract, as we have said, was indivisible and accordingly there was no agreement for sale of movables separately.

3. On the aforesaid analysis, we would answer the question in the negative.

4. The reference is accepted, but in the circumstances there will be no order as to costs. The reference fee be refunded.

S. Acharya, J.

I agree.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //