GENERAL ELECTRIC COMPANY OF INDIA PRIVATE LTD Vs. STATE OF BIHAR

JUDGEMENT

(1.) These two tax cases arise out of the common order dated 11th November, 1967, of the Commercial Taxes Tribunal, Bihar, passed in Revision Cases Nos. 171 and 172 of 1966, by which the Tribunal aforesaid affirmed, with some modifications, the order dated 27th January, 1964, of the Deputy Commissioner, Commercial Taxes, Sales Tax, Chhotanagpur Division, Ranchi, by which he set aside two orders of the Superintendent, Commercial Taxes, Hazaribagh Circle, by which the learned Superintendent had assessed the petitioner-company, the General Electric Company of India (P.) Limited, to sales tax and also imposed a penalty, one for the period 1st April, 1956, to 30th June, 1959 and the other for the period 1st July, 1959, to 31st July, 1961. As the question of law which has to be answered in both the tax cases is the same, both these tax cases were heard together and this order will govern them both.

(2.) The relevant facts are these :

(3.) Before proceeding to answer the question, it is necessary first to point out that the order of the learned Deputy Commissioner, directing a local inspection to find out whether the articles remain still movables even after transfer of property in the goods, is not a direction applicable to all cases. I have already pointed out that as regards one specimen, namely, contract No. 1117, on examination of the terms of the contract itself, the learned Deputy Commissioner arrived at the finding that property in the goods supplied passed only at the stage when the goods had become immovable and, therefore, the transaction was not exigible to sales tax. Obviously, the learned Deputy Commissioner did not direct any inspection in respect of articles, goods or materials supplied in pursuance of contract No. 1117 and similar contracts. He directed an enquiry in respect of contracts Nos. 3066 and 1225/ABM/BS and contracts similar to them on the finding that "it was not clear from the contract whether those accessories when the installations were completed, became permanent fixtures". It was not clear from the contract whether those accessories when the installations were completed, became permanent fixtures, is another mode of expressing that it was not clear from the contract whether at the time the property in those accessories passed they had become permanent fixtures or not. Regard being had to the circumstances, it must be held that the direction to hold inspection to ascertain whether the goods remain movable even after transfer of property in them, though couched in general terms in paragraph 33 of the order of the learned Deputy Commissioner, was a direction confined to cases where on execution of the terms of the contract it was not clear whether these goods remained movable even after transfer of property in these goods. I should also emphasise that while affirming this direction for local inspection in cases indicated by the Deputy Commissioner, the Tribunal rightly directed the assessing officer not to tax the goods merely because they remain movable even after completion of the contract, but also to consider whether there was any agreement for the sale of the movables.