G.K.MISRA, J. -
(1.) MESSRS . Utkal Distributors Pvt. Ltd. (opposite party) were assessed to sales tax, with or without penalty, for the quarters ending 31st March, 1963, 30th June, 1963, 30th September, 1963, 31st December, 1963, and 30th June, 1964, on account of supplies of materials such has hard granite rubble stones, bond stones, etc. Against the orders of assessment, the opposite party preferred first appeals before the Assistant Commissioner, Sales Tax, Cuttack. The appeals were dismissed.
In second appeal, the Tribunal by a common judgment passed on 23rd December, 1968, allowed the appeals and annulled the assessment holding that the contract in question was a works contract. The Tribunal refused to take in additional evidence a letter dated 22nd June, 1965, from the Under Secretary to the Government of Orissa in the Revenue Department to the Revenue Divisional Commissioner, under rule 61 of the Orissa Sales Tax Rules, 1947, thought it admitted a letter dated 9th January, 1968, from the Executive Engineer, Salandi Dam Division, to the opposite party. Being aggrieved by the orders of the Tribunal annulling the assessment, the State of Orissa asked for a reference under section 24 (1) of the Orissa Sales Tax Act, 1947 (hereinafter to be referred to as the Act ).
The Tribunal referred the following two questions to be answered by this court :
" (I) Whether, on the facts and circumstances of the case, the Tribunal was right in accepting in evidence the letter dated 9th January, 1968, of the Executive Engineer, Salandi Irrigation Project, which was not produced before the assessing or the first appellate authority and which was specifically objected to on behalf of the applicant under rule 61 of the Orissa Sales Tax Rules, 1947, in the course of hearing of the second appeal ? (2) Whether, on the facts and in the circumstances of the case, the contract in question is a works contract or is a contract for sale of chattels as such ?"
(2.) BEFORE us, the letter dated 22nd June, 1965, which was not accepted by the Tribunal was filed, and the learned Advocate for the opposite party did not take any exception to the letter being looked into for determination of the point in issue. Similarly, the learned standing counsel did not take exception to the letter dated 9th January, 1968, which has been accepted by the Tribunal. In this view of the matter the first question would be answered in the positive, that is to say, the Tribunal was right in accepting in evidence under rule 61 the letter dated 9th January, 1968.
The real question for consideration in these applications is, whether the supply of materials as per the terms of the agreement between the Public Works Department (P. W. D.) and the opposite party constitutes a "works contract" or a "sale" within the meaning of section 2 (g) of the Act.
(3.) A copy of the agreement was filed before us by the learned standing counsel for our consideration. It contains terms and conditions for the supply of metals and chips from Bajabati and Mandia (Pakhar) quarries to Expressway Organization by the opposite party. From the letter dated 22nd June, 1965, from the Revenue Department to the Revenue Divisional Commissioner it would be clear that Bajabati and Pakhar quarries originally belonged to Darpan Estate of Rani Umeswari Suthoo. After vesting of the estate, those quarries came under the ownership of the Government of Orissa in the Revenue Department who transferred them to the Public Works Department so that they would work out the quarries departmentally. As the quarries were not worked out departmentally and had been handed over to the contractors on realising royalty of Rs. 2 for one hundred cubic fee, the Revenue Department wanted to take back those quarries from the P. W. D. That question is not, however, relevant. The letter merely highlights the fact that the quarries were transferred to the Public Works Department who allowed them to be worked out by the contractors on charging a small royalty. The letter dated 9th January, 1968, written by the Executive Engineer, Salandi Dam Division, to the opposite party does not relate to these quarries as would appear from the fact that the Executive Engineer mentioned therein that the quarries belonged to the Forest Department which fact is repelled by the letter dated 22nd June, 1965. This letter also does not throw any light on the true character of the impost.;