1. The petitioner in these revision petitions filed under section 38 of the Tamil Nadu General Sales Tax Act, 1959 carries on business as manufacturing dealers in trailers, wheel-barrows and also as mechanical and structural engineers. For the assessment year 1974-75, the petitioner reported a total and taxable turnover of Rs. 18,78,446.62 and Rs. 12,74,682.04 respectively. After verification of the accounts, the assessing authority excluded certain inter-State sales and disallowing the claim for exemption made by the petitioner in respect of works contract executed by the petitioner and after making an addition of 5 per cent. for probable omission in the sales, the total turnover was fixed at Rs. 13,32,688 and the taxable turnover at Rs. 13,28,355. For the assessment year 1975-76, the petitioner reported a total turnover of Rs. 16,97,927.75 and a taxable turnover of Rs. 12,49,428.24. In respect of this year also, after verifying the accounts and excluding the inter-State sales and negativing the exemption claimed by the petitioner for works contract and making an estimated addition of 5 per cent. for omissions, the assessing authority determined a total turnover at Rs. 14,59,254 and the taxable turnover at Rs. 14,48,042. The petitioner preferred appeals to the Appellant Assistant Commissioner in Appeals Nos. 336 and 335 of 1977 in respect of the assessment years 1974-75 and 1975-76 respectively. Before the Appellate Assistant Commissioner, for the year 1974-75, the petitioner disputed its liability on a turnover of Rs. 1,11,281.94 as well as the rate of tax in respect of a turnover of Rs. 6,98,627.11. In the appeal preferred by the petitioner, for the assessment year 1975-76, the petitioner disputed its liability on a turnover of Rs. 2,04,543 and the rate of tax on a turnover of Rs. 8,23,819. The Appellate Assistant Commissioner confirmed the order of assessment for the assessment year 1974-75 and dismissed the appeal. However the petitioner was given partial relief in respect of the assessment year 1975-76 by deletion of a turnover of Rs. 68,954 being the additions made to the book turnover. Thereupon, the petitioner preferred appeals to the Sales Tax Appellate Tribunal in T.A. Nos. 1071 and 1072 of 1977, for the assessment years 1974-75 and 1975-76 respectively. At the time of hearing of the appeals before the Tribunal, the petitioner confined the dispute to the addition on the basis of best of judgment in respect of the assessment year 1974-75 and the disallowance of the claim of the petitioner under works contract in both the years 1974-75 and 1975-76. The Tribunal was of the view that there was no justification for the rejection of the accounts and resorting to a best judgment assessment and in that view deleted the addition of a taxable turnover of Rs. 63,254 in respect of the assessment year 1974-75. Dealing with the claim of exemption put forth by the petitioner in respect of works contract for the year 1974-75, the Tribunal concluded that the nature of the transactions was such that the erection part of the floor beams was incidental to the contract of supply of beams and therefore, it cannot be said that the petitioner fixed floor beams to the immovable property of the customers and that the property in the floor beams passed only when they became part of the immovable property. On that basis, the Tribunal held that in respect of the assessment year 1974-75, a turnover of Rs. 13,339 will be liable to tax. Considering the claim for exemption made by the petitioner on the basis of works contract for the assessment year 1975-76, the Tribunal concluded that the transactions were for the sale of manufactured goods by the petitioner and that separate transport and erection charges for the trusses had also been contemplated but the transport, erection and the labour charges and other amounts partly representing lump sum works contract cannot be properly included in the taxable turnover and directed their deletion. It is against these orders of the Tribunal that the petitioner has come up in revision before this Court questioning the propriety of the disallowance of the exemption as works contract claimed by the petitioner in respect of a turnover of Rs. 13,339 and Rs. 1,24,910.58 for the assessment years 1974-75 and 1975-76 respectively.
2. The principal contention of the learned counsel for the assessee is that the disputed turnover are not referable to outright sale transactions, but were only in the nature of works contract and that only a lump sum had been fixed as the value of the contract. Attention in this connection was drawn by the learned counsel for the assessee to the quotations given by the assessee as well as the invoices in respect of the transactions claimed to be works contract to establish that a lump sum amount alone had been fixed as the value of the contract for fabrication, supply and erection of trusses and purlins and floor beams in the premises of the customer. Reliance in this connection was placed by the learned counsel for the assessee upon the decision in K. A. Ramachar v. State of Madras  31 STC 598 and Hindustan Aeronautics Ltd. v. State of Karnataka  55 STC 314. On the other hand, the learned Additional Government Pleader submitting that the petitioner delivered manufactured goods at the site of the customers and the erection work was merely incidental to the contract of supply of finished goods, which was also attended to by the customers by carrying out the civil works and therefore, the contracts were for the supply of finished goods justifying the inclusion of the turnover referable to those transactions in the assessable turnover of the petitioner.
3. Regarding the turnover of Rs. 13,339, exemption in respect of which has been claimed by the petitioner for the assessment year 1974-75, we find that the relevant quotations as well as invoices have been made available. The break-up of this turnover of Rs. 13,339 is an under : Mr. N. Zachira Rs. 9,200, Mr. M. L. Sheik Dawood Rs. 3,258.40 and Mr. Abdual Shukoor Rs. 880.60. We find that the assessee was asked by the persons earlier referred to to fabricate, supply, transport and erect at site floor beams of different lengths. The assessee had, in accordance with the specifications given by the customers, quoted a lump sum rate for fabrication, supply, transport and erection of floor beams at site of the customers, without separately showing the cost of the floor beams as such. This quotation given by the assessee had been accepted by the customers referred to above and invoices have been issued in the name of the customers accordingly. Even in the invoices, the cost of fabrication, supply, delivery and erection at site has been shown in a lump sum and no separate amount had been fixed for the cost of the floor beams as such. The invoices dated 1st October, 1974, 10th October, 1984 and 18th October, 1984, 22nd January, 1975 and 1st October, 1974 (found at pages 102, 107 and 111 of the typed set of papers) bear this out. The question is, whether the amounts received by the assessee in respect of these transactions can be considered to be the sale price of the floor beams or whether they have been received towards a works contract. The correspondence resting with the invoices issued by the assessee in favour of several customers shown that the contract is one in its entirety and indivisible and incapable of being dissected into one of sale of floor beams and the other relating to erection in the site of the customer. In such a case, the property in the floor beams passed to the customers only upon erection in the site of the customer. We are unable to subscribe to the view taken by the Tribunal that the erection part of the contract is negligible and is incidental to the supply of floor beams. As we have already pointed out, it is difficult to cut up the contract into one of sale of floor beams and the other relating to the erection of the same. Floor beams of specifications required by one customer may not be required by another and it is difficult also to sell floor beams of different specifications required by different customers in the open market. In that sense, the erection part cannot be considered to be either a negligible part or even being merely incidental to the supply of the floor beams. The actual operation relating to the erection is found in the affidavit of the Sales Manager of the petitioner which is extracted in paragraph 6 of the order of the Tribunal. We are unable to draw therefrom the conclusion drawn by the Tribunal that it cannot be said that the petitioners themselves fixed the floor beams to the immovable property of the customers and that the property in the floor beams passed only after they became part of the immovable property. Having regard to the nature of the operations carried out in the process of erection as found in the affidavit of the Sales Manager of the petitioner, we are inclined to take the view that only on erection of the floor beams, the property in them passed to the customers and not at any anterior point of time. We are, therefore, unable to accept as correct the view taken by the Tribunal in this regard.
4. For the assessment year 1975-76, the assessee has claimed exemption as works contract a turnover of Rs. 95,490.10 and Rs. 20,420.30 with reference to the work done for M/s. Abirami Theaters Private Limited, Madras. With reference to these transactions also, the correspondence as well as the relative invoices have been made available (at pages 94 to 98 of the typed set of papers). M/s. Abirami Theaters Private Limited have made enquiries of the petitioner for the fabrication, supply, delivery and erection at site of steel roof trusses of different specifications and purlins, tie runners and gable rafters. In response to this, the assessee has addressed the customer quoting a lump sum of Rs. 3,480 per tonne for fabrication, supply, delivery and erection at site of the trusses and other articles required by the customer. In its turn, the customer had addressed a letter referring to the quotation and requested for a reduction of Rs. 80 per tonne from the quoted rate of Rs. 3,480 per tonne and that was agreed to by the assessee and finally, the assessee offered and the customer accepted a lump sum of Rs. 3,520 per tonne for fabrication, supply, transport and erection of trusses and purlins at the site of the customer. The invoices dated 29th December, 1975 (found at pages 86 and 93 of the typed st of papers) clearly establish that the contract was one and entire and did not permit a dissection of the same into one for sale of trusses, purlins, etc., and the other relating to their erection in the site of the customer. Here again, the invoices do not show that the prices mentioned therein had been shown separately in respect of the cost of the trusses and purlins manufactured and transport and other charges. In other words, the contract was one and indivisible and it was for a lump sum per tonne. It was also to be borne in mind that the trusses manufactured by the assessee to meet the specifications of a particular customer might not be useful to another customer, nor can it be offered for sale in the market. On a careful consideration of the correspondence that was exchange between the assessee and the customer and the terms of the quotation, it is difficult to uphold the view of the Tribunal that the transactions with M/s. Abirami Theaters Private Limited represented the sale of trusses, etc. It is difficult, having regard to the correspondence and the invoices, to consider the competent parts enumerated in the contract as distinct and separate items de hors the totality of the contract, which the assessee had performed only after the trusses and the purlins were erected in the structure as a whole and only then, the property in them as well as the component parts actually passed to the customer after the performance of the contract by erecting the trusses, etc., in the site of the customer. There is nothing to indicate any intention on the part of the assessee to sell the trusses and purlins as such to the customer. On a due consideration of the correspondence as well as the invoices, we are inclined to take the view that the property passed to the customer only on erection at the site of the customer and since the property did not pass at an earlier point of time, it cannot be said that there was an anterior sale or trusses prior to the completion of the erection work. Therefore, the conclusion of the Tribunal that the assessee and the customer contemplated a sale by the assessee and a purchase by the customers of the manufactured goods at the rate of Rs. 3,480 per metric tonne cannot be supported.
5. We are fortified in the aforesaid conclusion of ours by the decision in K. A. Ramachar v. State of Madras  31 STC 598 and Hindustan Aeronautics Ltd. v. State of Karnataka  55 STC 314. The first of these cases related to the very asessee, who is the petitioner in these revisions, though for an earlier assessment year. The assessee claimed that a turnover of Rs. 1,63,843.93 represented the cost of fabrication, supply and erection of trusses, purlins, etc., made by the assessee in the premises of the customer and that turnover should be exempted as referable to works contract carried out for a lump sum. There also, the invoice was drawn by the assessee for a lump sum without fixing a separate amount for the actual cost of the trusses as manufactured. Construing similar terms with reference to fabrication, supply, transport and erection at site, it was held by a Division Bench of this Court, that the contract was a composite one and the property in the trusses, etc., passed only after the completion of the contract by erecting the trusses, etc., at site and there was no intention to sell trusses as such to the customer. Similar is the position in these cases with reference to the two assessment years in question. Again, the Supreme Court had to consider in Hindustan Aeronautics Ltd. v. State of Karnataka  55 STC 314 the characteristics of a works contract. It was pointed out that mere passing of the property in an article or commodity in the course of the performance of the transaction does not render the transaction as one of sale, for, even in a purely work or service contract, it is quite possible that articles may have to be used for executing the work and the property in such articles may pass to the other party, but that would not necessarily convert the contract into one of sale of those materials. The Supreme Court further pointed out that in every case it has to be found out what was the primary object of the transaction and the intention of the parties, for, it may be that in some cases even while entering into the contract of work or even service, the parties may enter into separate agreements, one of work and service and the other of sale and purchase, but in such cases, the transaction would not be one and indivisible but would fall into two separate agreements, one of work or service and the other of sale. The Supreme Court further laid down that the distinction between contract for work and labour one for sale of goods is a fine one and that the test is whether or not the work and labour bestowed end in anything that can properly become the subject of sale and that neither the ownership of the materials nor the value of the skill and labour as compared with the value of the materials is conclusive although such matters may, in the circumstances of a particular case, be taken into consideration to determine whether the contract was in substance one for work and labour or one for the sale. Applying the test laid down by the Supreme Court, to the contracts entered into by the assessee with the customers in these cases, it is seen that the main object of the contract entered into by the assessee was not the transfer of floor beams, trustees and purlins and their delivery of possession as chattel to the customers. Under those circumstances, the turnover of Rs. 13,339.60 and Rs. 1,24,910.58 ought not to have been included in the taxable turnover of the assessee for the assessment years 1974-75 and 1975-76 respectively. We, therefore, allow the revision petitions. There will be no order as to costs.