JUDGMENT Prakash Krishna, J.
1. The short question that arises for determination in this revision is whether a contract of supply M.S. fabricated juice heaters (heating surface 2500 Sq. ft.) is in the nature of supply of material or a works contract.
2. The assessment year involved is 1984-85. The applicant is a sole proprietorship concern. It according to the applicant, undertook job-work of fabrication and erection of sugar mill machinery and parts. It disclosed the gross turnover at Rs. 5,78,000 but did not accept any tax liability as it claimed that the said turnover be treated as works contract. The Sales Tax Officer treated the said turnover as contract of sale and imposed the sum of Rs. 34,780 as tax on the turnover of Rs. 5,83,000. This assessment order has been confirmed by the appellate authority with the small modification that the amount of tax was enhanced by Rs. 100. The appellate order has been confirmed by the Tribunal in the second appeal, by the order under revision.
3. The applicant during the assessment year in question has entered into two contracts one with U.P. Co-operative Sugar Factories Federation Limited dated June 14, 1984 for the supply of one number vacuum crystalliser of 30 tons capacity and the another with M/s. Dhampur Sugar Mills Limited, Dhampur, for the supply of three numbers of M. Section Fabricated vertical juice heaters (heating surface 2500 sq. ft.). The Tribunal has in extenso noticed the terms and conditions of the aforesaid two contracts in its order under revision. The contract with the U. P. Co-operative Sugar Factories Federation Limited has been held to be for the supply of the goods in question and not a works contract on the finding that the sales tax due on such supply of goods has also been charged. Besides it, the insurance charges for the transportation of goods were also charged and reimbursed in the bill which was paid by the applicant. The purchasers were liable to pay transportation and insurance charges. There is nothing in the contract that the goods manufactured shall be delivered to the purchasing parties after its trial run. On these facts no fault can be found out in the order of the Tribunal. The learned Counsel for the applicant also did not seriously challenge the findings recorded by the Tribunal on this issue. Therefore the finding of the Tribunal that it was not a works contract with the U.P. Co-operative Sugar Factories Federation Ltd., is upheld.
4. But the contents of contract with M/s. Dhampur Sugar Mills Ltd., are different. The applicant fabricated, vertical juice heater of required capacity against required specifications and drawings supplied by the purchasers. The terms of such supply provided that the whole equipment shall be assembled, given a coat of paint and mark properly before leaving work for erection and fitting at the site of the purchasers. The applicant was required not only to supply the goods in question but to erect and fit it at the site of the purchasers. The contract was not complete unless the work of erection and fitting is completed by the applicant's staff. However the Tribunal has held that the terms of the contract that the whole equipment was to be assembled and given a coat of paint and mark properly shows that the goods to be supplied by the applicant were complete at their factory site. This finding of the Tribunal is not in accordance with the judgment of the Supreme Court given in the case of Ram Singh & Sons Engineering Works v. Commissioner of Sales Tax [1979] 43 STC 195 : [1979] UPTC 548. It has been held that the primary tests in between a contract of sale and contract for work and labour is whether the contract is one whose main object is transfer of property in a chattel as a chattel to the buyer, though some work may be required to be done under the contract as ancillary or incidental to the sale or its carrying out of work by bestowal of label and service and materials are used in execution of such works. It has relied upon its earlier judgment given in the case of Commissioner of Sales Tax v. Purshottam Premji . It has been held in the case of State of Rajasthan v. Man Industrial Corporation [1969] 24 STC 349 (SC), that a contract for providing and fixing four different types of windows of certain sizes according to the specifications, designs, drawings and instructions set out in the contract, was contract for work and labour and not a contract for sale. The same test has been applied by the Supreme Court in subsequent cases also.
5. In the light of the aforesaid decisions if the contract in question is considered, it will become immediately clear that there is similarity of facts in between the case in hand and the case of State of Rajasthan v. Man Industrial Corporation [1969] 24 STC 349 (SC). The equipment to be supplied to the Dhampur Sugar Mills was according to the specifications, designs, drawings and instructions of the purchasers. The equipment, thus, supplied was required to be erected and fitted at the site of the purchaser. The vertical juice heater came into existence after its erection and commission at the purchaser's site by the dealer and it has come into existence as an unit. There is no transfer of property in the goods by the manufacturer to the purchaser as a chattel. It is essentially a transaction for fabricating component parts and fixing them on the premises of the purchaser so as to constitute a vertical juice heater. The finding of the Tribunal with regard to the contract with M/s. Dhampur Sugar Mills accordingly is set aside. It is held that it was a case of works contract and not for the supply of goods.
6. The aforesaid revision was connected with the S.T.R. No. 1184 of 1993 and S.T.R. No. 1187 of 1993. The office has reported that both the revisions have already been decided. The counsel for the applicant placed the judgment of revision No. 1187 of 1993. The sales tax revision was filed by M/s. National Kisan Industries. This Court without any discussion has remanded the matter with the following observation:
After going through the records in my view this is a fit case where the matter should be remanded back to the Tribunal for recording a fresh finding of fact, after affording an opportunity of hearing to the assessee.
7. The aforesaid short order is not at all helpful for deciding the controversy involved in the present revision.
In the result the revision is allowed in part. The dealer is liable to pay sales tax only on the amount of the turnover with regard to the sales made to U.P. Co-operative Sugar Factories Federation Ltd. No order as to costs.