Amiya Kumar Mookerji, J. - (1.) This rule is directed against an order dated 21st December, 1970, passed by the Additional Member, Board of Revenue, West Bengal, confirming the order of the Commercial Tax Officer dated 17th May, 1966, by which, the petitioner's liability to pay tax under Section 4(2) read with Section 4(5)(a) of the Bengal Finance (Sales Tax) Act, 1941, was determined.
(2.) The petitioner is a partnership-firm carrying on business under the name and style of "Eastern Galvo-Aluminizing & Engineering Works", having its chief place of business at 59, Gray Street, Calcutta-6. The business of the firm was started on 1st January, 1964. The nature of the petitioner's business is of (i) executing individual works contract, viz., galvanization of steel works supplied and belonging to the customers, (ii) manufacturing in West Bengal for sale of engineering goods, e.g., fabricated steel structures and galvanized materials, and (iii) executing pure and simple labour contract. A sales turnover of Rs. 46,377.47 effected during the period from 1st April, 1965 to 23rd March, 1966, was shown in the application for registration filed under the Act on 23rd March, 1966. In compliance with a notice under Section 14(1) of the Act, the petitioner-firm produced before the Commercial Tax Officer on 17th May, 1966, all relevant books, accounts, documents, contracts and purchase orders including copies of the bills. On scrutiny of the records, the Commercial Tax Officer observed in his order dated 17th May, 1965 "they undertake mainly fabrication work and galvanizing with materials supplied by the customers. They also manufacture cover angles". It is also stated in the said order that in fabrication work they seldom supply any material but considerable quantity of zinc is supplied in the case of galvanizing work. Sales exceeded Rs. 10,000 on 7th June, 1964, per sales register show ing bills for galvanizing work, as such the dealer is liable to pay tax from 8th August, 1964. According to the petitioner, the fabrication and galvanizing work executed by them with the materials supplied by the customers partook of the nature of indivisible works contract without involving any divisible agreement for sale of chattel qua chattel. The Commercial Tax Officer held, by his order dated 17th May, 1966, that the petitioner attracted liability to pay tax under Section 4(2) read with Section 4(5)(a) of the Act on and from 8th August, 1964. The petitioner preferred a revision petition before the Assist ant Commissioner of Commercial Taxes, Calcutta. By an order dated 3rd September, 1966, the Assistant Commissioner rejected the petitioner's revision petition. The petitioner preferred further revision petition under sec tion 20(3) of the Act before the Additional Commissioner of Commercial Taxes. It was contended before him that (1) in some cases, the railways sup plied steel and zinc which were galvanized by the petitioner, i.e., the entire materials for fabrication were supplied by the railways and the petitioner only executed labour contract, (2) in some other cases, the railways supplied steel and the petitioner themselves supplied their own zinc with which they did the fabrication and (3) in some other cases, the petitioner had made pure and simple sales of goods. The Additional Commissioner found that so far as the second category was concerned, the materials were supplied by the petitioner, so the transaction under that category was rightly considered as involving sales of materials and, according to the petitioner's sales register, the Commercial Tax Officer found that such sales had exceeded taxable turnover of Rs. 10,000 on 7th June, 1964, and, accordingly, the petitioner was liable to pay tax under Section 7 of the Act. The petitioner's further revision petition before the Additional Member, Board of Revenue, was rejected by an order dated 20th December, 1970. The petitioner being aggrieved, moved this Court in an application under Article 226 of the Constitution and obtained the present rule.
(3.) Mr. Chakraborty, appearing on behalf of the petitioner, contended that, on the facts and circumstances of the present case and having regard to the available materials including contract and documents, the Additional Member, Board of Revenue, should have found and held that the amount received by the petitioner from galvanizing and/or fabrication contract did not constitute any part of the sales turnover and the Tribunals below had committed an error in not excluding from the turnover the said amount. The Tribunals below committed an error in holding that the materials, viz., zinc were supplied by the petitioner in the fabrication made by them and the transaction under that category was considered as involving sale of materials. The Tribunals, according to Mr. Chakraborty, had fallen into an error in confusing between a mere supply of materials used or consumed in the execution of works contract as a "sale" of those materials as such. Reliance was placed by Mr. Chakraborty on three decisions of the Supreme Court: Government of Andhra Pradesh v. Guntur Tobaccos Limited [1965] 16 S.T.C. 240 (S.C.), State of Gujarat v. Kailash Engineering Co. (Pvt.) Ltd. [1967] 19 S.T.C. 13 (S.C.) and State of Madras v. Richardson & Cruddas Limited [1968] 21 S.T.C. 245 (S.C.).;