1. The main question we have to decide is as to whether the transactions in dispute as to bus-bodies are sales of goods or works contracts. The Tribunal in one of these cases and the Board of Revenue in the other, have expressed the. view that they are sales of goods and held that they are chargeable to tax under the Madras General Sales Tax Act, 1939. The Tax Case of 1965 pertains to the assessment year 1956-57 and the other, which is an appeal, the next year.
2. The assessee is a registered company with limited liability and carries on business with its headquarters at Madras, which includes the manufacture and supply of bus-bodies. The disputed turnover in both the cases covers the supply of bus-bodies to the State Government under contracts entered into with them in the usual form of tender notice, offer and acceptance. The department as well as the Tribunal proceeded on the basis that the contracts, read as a whole, amounted to sale of bus-bodies as finished units made according to specifications in terms of the contracts and mounted on chassis supplied by the Government.
3. That view is vigorously contested before us. For this purpose, our attention is invited to the tender notice and the offer which was accepted. The tender notice contains certain instructions, specifications and certain conditions of tender. The submission of sealed tenders should be superscribed 'tenders for coach-works'. The total quantity required was mentioned to be 100 coach-works. The prices should be for delivery of the completed buses at the Government Bus Service. Delivery is to be according to a stipulated programme, and failure to comply with the schedule will involve payment of penalty at the rate prescribed. The contractor must cover the chassis supplied by Government by comprehensive insurance against fire risks and the Government department was not to be liable for any damage or loss to the chassis from the time they were delivered to the contractor until such time the completed buses were taken delivery of. The tender notice contains detailed specifications as to measurements, design, skeleton framework, timber fillets, flooring, panelling, roof, driver's cab, windscreen and windows, destination boxes, seats, illumination, fittings, painting, ventilation, specification of certain parts and materials to be used in the building of bus-bodies. Under the heading 'prices' sales tax should be separately furnished. The offer made in response to the tender notice stated that the quotation was for composite bodies and the prices quoted were for the construction and mounting of bus-bodies at the assessee's works on certain type of chassis to be delivered by the Government and collected by their representative ex-works spot. The offer also mentioned that, on account of certain reasons, the rate offered was slightly higher than the rate at which it had executed prior contracts with the Government. The specifications attached to the offer recited that the contract was 'for building and mounting all-steel city type bus-body on Mercedes Benz 190' W.B. forward control chassis for the Government Transport, Madras'. Various other details were given. The Government accepted the offer and stated through the honorary Director of Government Transport, Madras :
I am to inform you that it has been decided to entrust to you 50 (fifty) Mercedes Benz chassis for building steel-aluminium type bodies at a cost of Rs. 13,250 each plus sales tax.
4. This communication added that the offer was accepted subject to certain conditions mentioned therein. Subsequent correspondence shows that certain' specified dates were given for delivery each time of particular number of bus-bodies.
5. With reference to those terms and conditions of the contract, the argument for the assessee is that the intention of the parties was to treat the transaction as of works and not for supply of finished chattels as such. Reliance is placed on certain phraseology used in the tender notice, offer and acceptance, as for instance, tenders for coach-works, price for '100 coach-works', for building and mounting, and the like. It is also said that the provision for inspection from time to time by the Government department during the construction of the bus-bodies, right of deviation from specifications and the description in the contract of what was eventually delivered as completed buses, also confirm that the contract is a works contract. We have carefully perused the tender notice, offer and acceptance, but, in our opinion, it is not possible to accept the assessee's view of the contract. There are numerous decisions on the subject, each rendered in the light of the particular facts. In them certain tests have been suggested or applied, as the situation required, in the light of the special facts, to decide the question, but all of them have been directed to an ascertainment of the intention of the parties, as appears from the relative contract. The main problem, therefore, is one of ascertainment of the intention of the contract, and for that purpose one must have regard not merely to the particular terms expressed in various parts of the agreement, but the contract read as a whole. Where it is a case of movable property, the ascertainment of the intention of the parties from contracts is not as easy as in other cases involving structural works on immovable property. We do not think it necessary or desirable to formulate tests for universal application to every situation. In the nature of things, each contract has to be looked at on its own to decide the question.
6. Reading the contract here in question as a whole, we are left with the impression that the predominant intention, as emerges from it, is one of purchase by the Government of completed bus-bodies as chattels, but taken delivery thereof after their fixation and mounting on chassis sup-' plied by them. In other words, the contract contemplates purchase of bus-bodies made to order and also stipulates for their being mounted on the chassis before delivery. We do not think that the intention of the parties, with any certainty, can be gathered from stray words used here and there in the documents which go to form the contract, as have been relied on by the assessee or the department before us. But one significant fact which supports the view we have taken of the contract is that the contract does not contemplate that as and when parts of the bias-bodies are put on the chassis, in the course of construction, the property therein must pass to the Government. The contract is consistent with the property in the bus-body being passed only at the time of the delivery of the completed buses. Under the terms of the contract, the chassis when the bus-body is being built up and mounted on them remain the property of the Government. In fact, the contractor is asked to effect insurance in respect of them against fire risks. There is no indication in the contract that if the body-building is left unfinished at any particular stage and it could not be completed, the Government is bound to take delivery of such unfinished work and pay the contractor on that basis. What has been agreed between the parties, as far as we are able to see from the contract, is that payment will be made only against completed bus-bodies mounted on the chassis. The act that the parties have agreed that the contractor should mount the bodies on the chassis is not inconsistent with sale of bus-bodies as chattels. In the nature of things, such mounting* appears to be part of the bargain for sale and will, in our opinion, make no difference to the character of the transaction as a sale of goods. We are reminded for the assessee that this is not a case where the bus-bodies are separately constructed and thereafter they are mounted on chassis, but the bus-bodies themselves are constructed on the chassis from the start, by fitting into it piece by piece. That again, as we consider, does not militate against the idea of sale of the bus-bodies as such.
7. Looking at the terms of the contract, it seems to us that they are very near to those which the Supreme Court interpreted in Patnaik and Company v. State of Orissa  16 S.T.C. 364. That was also a case of construction of bus-bodies on chassis supplied by the State of Orissa, on terms similar to those in this case. The language used in the Orissa contract also was 'for constructing bus-bodies on the chassis supplied by the Governor of Orissa' and the offer spoke of a rate for such work. Applying the same tests, as the Supreme Court did in that case, to the contract under consideration, we come to a similar conclusion. State of Gujarat v. Kailash Engineering Co. (Pvt.) Ltd.  19 S.T.C. 13 is not apposite to this case, for, there the contract contained a definite provision that as and when materials were brought into the yard of the railways, they became the property of the railways.
8. We hold, therefore, that the department as well as the Tribunal came to the correct conclusion that the transactions in question were sales of goods and as such they were liable to tax.
9. In T.C. No. 51 of 1965 a further question arises. The turnover relating to bus-bodies has been subjected to an additional tax at six pies per rupee. The department for this purpose relied on Section 3(2) and item (iv) in the description of the goods pertaining to that provision. That item is :
(iv) Motor vehicles including motor cars, motor taxi-cabs, motor cycles and cycle combinations, motor scooters, motorettes, motor omnibuses, motor vans and motor lorries.
Chassis of motor vehicles.
Component parts of motor vehicles.
Articles (including rubber and other tyres and tubes and batteries) adapted for use as parts and accessories of motor vehicles, not being such articles as are ordinarily also used for other purposes than as parts or accessories of motor vehicles.
10. We are inclined to think that the contention for the assessee that bus-bodies do not fall within any one of the goods in this item is correct. Bus-bodies cannot, in our opinion, be regarded as component parts of motor vehicles or even as accessories thereto. In fact, that appears to be the view of the Government themselves in the subsequent year, as the department did not charge the turnover for that year to additional tax. In the 1959 Act bus-bodies have been specifically included in the relative item in Schedule I thereto. We are of the view, therefore, that the additional tax charged cannot be sustained.
11. T.C. No. 51 of 1965 is partly dismissed and partly allowed and the other tax revision case is dismissed. There will be no order as to costs in either of them.