DAMODAR VALLEY CORPORATION Vs. STATE OF BIHAR

JUDGEMENT

(1.) This is a reference under Section 25 (1) of the Bihar Sales Tax Act, 1947 (Bihar Act XIX of 1947), hereinafter mentioned as "the Act".

(2.) The assessee is a Corporation established and incorporated under Damodar Valley Corporation Act, 1948 (Act XIV of 1948). It was assessed to Sale-tax, by the Sales Tax Officer, Hazaribagh, for the period from the 1st of April 1950, to the 31st of March, 1952, by an order dated the 12th August, 1952, under Section 13, Clause (5) of the Act appeal, against this assessment, under Section 24 of the Act, was dismissed by an order dated the 5th May, 1963, except for the remand on one point, by the Deputy Commissioner of Sales Tax, Bihar. A revision to the Board of Revenue was also unsuccessful, as it was rejected on the 1st October 1953. The Board, however, was moved under Section 25 (1) of the Act for making a reference to the High Court, and, accordingly, the Board of Revenue, by its order dated the 27th of May, 1954, has referred the following question of law for the decision of this Court: "Whether in the facts and circumstances of the case it can be held that property in the goods included in Schedule A did pass to the contractors, and the transaction amounted to sale?" In order to decide the above question, it is necessary to know the nature of the transaction, which is the subject-matter of the present controversy.

(3.) The Corporation on the 24th of May, 1950 entered into an agreement with (1) Hindu Construction Ltd. and (2) Patel Engineering Co., Ltd., for the construction of Konar Dam in the Hazaribagh district. This agreement was subsequently modified on the 10th March, 1951, by a Supplementary agreement, entered into between the parties as a result of a change in the design of the dam. The original Clause (8) of Part II of the agreement of 1950 was substituted by a fresh Clause (8) in the Supplementary agreement. I may at this stage reproduce the relevant portions of the substituted Clause (8), of the Supplementary agreement, which have been relied upon by the parties before this Court: "Part II -- Special Conditions":