GULATI, J. - (1.) This is a petition under article 226 of the Constitution. The petitioner is a partnership firm which carries on business of automobile engineers and of running a service station and a workshop at Lucknow in the firm name of M/s. Bajoria Halwasiya Service Station. On 12th March, 1968, the petitioner entered into a contract with the Deputy Director of Agriculture, U.P., to fabricate and supply two steel bus bodies on chassis to be supplied by the Deputy Director for a lump sum of Rs. 4,100 plus sales tax for each bus body. The bus bodies were to be manufactured in accordance with the specifications and with the materials specified in the memorandum of specifications annexed to the agreement. The bus bodies were also required to be fitted with certain accessories like number plates, reflectors, light and electric bells, water-proof tarpaulins etc. The contract was to be executed by a specified date and the payment was to be made to the petitioner after a certificate of fitness had been furnished from the transport department of the Government.
(2.) IN due course the petitioner executed the contract and received payment under it. The petitioner also deposited a certain amount by way of sales tax. When the proceedings for assessment under the U.P. Sales Tax Act for the assessment year 1967-68 commenced the petitioner claimed exemption from tax in respect of the payment received by it from the Deputy Director on the ground that the contract executed by it was a contract of work and labour not involving sale of any goods. This contention was not accepted by the Sales Tax Officer, who levied tax on the turnover representing the sale proceeds of the bus bodies at the rate of 10 per cent. treating the bus bodies to be taxable at a single point under notification issued under section 3-A of the Act. The petitioner has challenged the assessment order in this writ petition on various grounds.
(3.) THE first ground upon which the assessment order has been challenged is that the contract under which the petitioner received the payment in dispute was a contract of work and labour and not a contract for the sale or supply of any goods and as such the U.P. Sales Tax Act had no application. The next contention is that the bus bodies are not covered by the relevant notification and the last contention is that the notification itself is ultra vires being outside the scope of section 3-A of the Act.;