V. Ramaswami, J.
1. The assessee in this case agreed to supply to the Superintending Engineer, P.W.D., Madurai Circle, auditorium chairs for the Auditorium Block in the Madurai Agricultural College at Othakadai, Madurai. The notice calling for tenders giving the item of goods to be supplied is as follows:
Agreement for the work of providing seating arrangements for Auditorium Block in Madurai Agricultural College at Othakadai, Madurai. S.No. Qty. Description of the item MDSS Rate in Unit in AmountNo. figures figuresand andwords words1 2 3 4 5 6 71. 860 Fabricating and supplying of audito-Nos. rium chair with wooden seat back,arm and partition ends stitchingupholstery fixing and assemblingthe seats and back to form chair onstanchion with legs, paintingtwo coats the wood work withsuitable colour approved by thedepartment, etc., complete.(The cost of the chair should be in-clusive of providing foam rubber2 thick for seat and cotton padd-ing 1' thick for back, rexine clothto stitch over the cushion 4' x 2'channel to accommodate seats onit, legs of suitable size and shape tosupport the seat and other fixturesrequired for assembling the seat.etc.)2. 140 Providing formica sheets with all ... ... ... ...'Nos. necessary fittings to the ends Spl.of the chairs to the required size,etc., complete.
2. There were special conditions relating to this work. Clause 2 provided that the chairs should be supplied to the section stores at site of work at Madurai Agricultural College, Othakadai, and Clause 6 required a sample of the chair to which the tenderer offered rates to be furnished to the department. The assessee tendered to supply the chairs at the rate of Rs. 75 per chair. This tender was accepted. The assessing officer sought to tax the amount paid for the chairs. The assessee contended that it was not liable to be included in the taxable turnover as the fabrication and supply of the chairs amounted to a works contract. This contention of the assessee was rejected by the assessing officer as well as the Appellate Assistant Commissioner and the Tribunal.
3. In this revision petition, the Learned Counsel for the assessee contended that as per the contract, it was to make chairs according to the specifications and then fix the same in the auditorium, that the contract was a composite contract for fabrication, supply and erection of the auditorium chairs and that, therefore, it was a works contract and the turnover relating to the same could not be included in the taxable turnover. In this connection, he referred to the decision of the Supreme Court in Vanguard Rolling Shutters & Steel Works v. Commissioner of Sales Tax : 3SCR165 and some of the other decisions of the Supreme Court and this Court. In all these decisions, supply and erection of doors or windows in a building were considered to be works contract. But, as pointed out by the Supreme Court in Union of India v. Central India Machinery . : (1977)2SCC847 , the question whether a contract is one for sale of goods or for executing works or rendering services, is largely one of fact, depending upon the terms of the contract, including the nature of the obligations to be discharged thereunder and the surrounding circumstances.
4. The Learned Counsel for the assessee was at pains to point out that it was also under an obligation to erect the chairs in the auditorium and unless that also was done, the work was not complete and it will not be entitled to be paid and that, therefore, it would amount to a works contract. We are unable to discern any clause in the special terms and conditions of the tender suggesting any obligation of fixing the auditorium chairs in the auditorium building. The Learned Counsel referred to certain correspondence that passed between the department and the assessee. Even from these letters we are not able to spell out any obligation to fix the chairs to the ground to make it as part of the building itself. Clause 8 of the special terms and conditions relied on by the Learned Counsel for the assessee only refers to an obligation on the part of the assessee to remove any of the defective materials within a period of 12 months from the date of erection. But it does not make it obligatory on it to erect the chairs in the auditorium as part of the building itself. In fact, the Tribunal pointed out that the assessee had not produced the relevant records and correspondence that passed between the assessee and the department to determine the nature of the contract in this particular case. In these circumstances, we are unable to hold that the contract in this case was a composite contract for the sale of the chairs as also the erection of the same in the auditorium, making it a works contract.
5. This revision is, therefore, liable to be dismissed and it is accordingly dismissed with costs. Counsel's fee Rs. 200.