- (1.) The respondent carries on the business of fabricating "steel doors, windows, sashes and other goods". On April 20, 1957, the respondent submitted in pursuance of an invitation by the Executive Engineer, Ajmer Central Division, its tender for providing and fixing "S. H. Windows 'W' Type", "S. H. Windows 'W1" type, "T. H. Windows" and "Composite Windows" of certain sizes "in accordance with the specifications, designs, drawing and instructions". The tender was accepted and the respondent carried out the contract.
(2.) The Sales Tax Officer 'B' Circle, Jaipur City-, included in the taxable turnover of the respondent Rs. 23480 received under the contract. He held that the contract with the Executive Engineer was one of sale of goods and the respondent had with a view to promote sales of foods manufactured by it "voluntarily offered to fit" the goods and had made no separate charge for that service. The Deputy Commissioner Excise and Taxation in appeal held that from the acceptance of the tender, two contracts resulted: one for providing doors and windows and another for "fixing" those doors and windows in a specified building, and that the price of the goods supplied, but not the charge for service, was taxable. He accordingly remanded the case with a direction to assess tax on the price for sale of materials only. The Board of Revenue exercising revisional power confirmed the order passed by the Deputy Commissioner observing that the contract undertaken by the respondent was not a contract of service.
(3.) The following question was referred by the Board of Revenue to the High Court of Rajasthan: "Whether on the proper interpretation of the contract between the applicant and the Executive Engineer, C.P.W.D., Ajmer, regarding the providing and fixing of the steel windows to the Accountant General's Office, Jaipur, and looking to the terms of the transaction of the type undertaken by the applicant the Board were justified in holding that the contract was divisible between two parts, representing the sale of the windows and the labour charges in fixing the same and thus partly liable to sales-tax - The High Court held that the contract between the respondent and the Executive. Engineer was a "building contract'' and the amount received by the respondent was not taxable.;