BANE MADRAS LTD Vs. STATE OF KERALA
HIGH COURT OF KERALA
BANE (MADRAS) LTD.
STATE OF KERALA
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(1.) These revision cases arise out of proceedings assessing the petitioner to sales tax under the General Sales Tax Act, 1125 in respect of the years 1958-59, 1960-61 and 1961-62. The petitioners who are dealers in motor vehicles were the authorised dealers of Messrs. Premier Automobiles Ltd., Bombay in respect of Dodge Trucks for Kerala State during the years in question. It is the common case that the petitioners entered into contracts for the supply of motor vehicles fitted with bodies with the Kerala State Electricity Board and some other customers in the State in these years. The main contention of the petitioners which, is common in all these cases is that the contracts with the Kerala State Electricity Board and the other customers were only for the sale of Dodge chassis and bodies were fitted up in the chassis by Messrs. Simpson and Co., Madras and Sree Rama Vilas Motor Service (Private) Ltd., arranged by the petitioners on behalf of the several purchasers at their request. The plea of the petitioners is that the contracts for the construction of bodies on Dodge chassis are not contracts of sale but only contracts of work and the turnover resulting therefrom has to be exempted from taxation and even if such turnover is assessable to tax the petitioners can be assessed only at the rate of 2% and not 7%. All the three appeals giving rise to the revision cases were heard together and disposed of by a common order by the Appellate Tribunal on the ground that the controversy between the parties in all the appeals is identical.
(2.) In view of the decision in Mckenzies Ltd v. State of Maharashtra (1965) 16 STC. 518 the contention that the contracts for building of bodies are only for execution of works was not pressed before the Appellate Tribunal. The Appellate Tribunal observed thus:
"The appellant's learned advocate submitted that be does not press the contention that cost of body building would amount to works contract in view of the decision of the Supreme Court in Mckenzies Ltd. v. State of Maharashtra, (1965) 16 STC. 518."
In view of the above statement, it is not open to the petitioners to raise the contention before us that the contracts relating to the building of bodies are not contracts of sale but merely for performance of service.
(3.) The Appellate Tribunal posed the question for decision in the appeals thus:
"Whether the sales affected by the company to the Electricity Board would take in only the chassis and whether in the matter of bodies built, the appellant company has acted only as an agent of the Electricity Department or whether the sale is of the entire vehicles inclusive of the body or in other words whether the sales were of body built chassis."
It is agreed that the above statement embodies correctly the contentions raised by the petitioners. The assessing authorities as well as the Tribunal found that the contracts between the petitioners and the Kerala State Electricity Board and the other customers were not for sales of mere chassis alone but for vehicles, that is chassis fitted up with bodies of the types specifically mentioned by the purchasers.;
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