And whereas advance payment are to be made by the Railways to the Contractor against Railway Boards said order That the Contractor shall hold at his works at Bharatput and or at the works of his sub contractors the Stores and articles of the Railways in respect of which advance may be made to him against the said order.
The Commercial Tax Officer provisionally assessed the Company under s. 7 D of the Rajasthan Sales tax Act on the Sale of wagons to the Railway Board for the month of May 1968, and served a demand numberice for payment of Rs.
Since the Company was registered as a dealer under the Sales tax Act, it had to bear, in the first instance, the charge of the tax although its incidence numbermally passes on to the purchaser, in the absence of a companytract to the companytrary under the provisions of s. 64 a of Sales of Goods Act.
From the Judgment and Order dated 31 1 1969 of the Rajasthan High Court in Civil Misc.
The State of Rajasthan and the Commercial Taxes Officer in their joint reply companytended that the companytract was one for sale of wag ons.
Hence this appeal by the Union of India.
No packing charges on account of the same will be received from you.
That in the event of a finding that the companytract is in reality a companytract for sale the respondent Union of India be prohibited from claiming refund from the petitioner of the sum of Rs.
The relief prayed in the petition was That an appropriate Order be made determining whether the companytract in question is in the nature of a companytract for sale of goods, or works companytract.
By its letter of August 14, 1968, the Railway Board finally informed the Company that, in future it would number reimburse the Company for the sales tax if paid by it in companynection with the supply of wagons 1 1972 2 S.C.R. 927.
After examining in detail the terms and companyditions of the companytract as disclosed by the relevant documents on the record, the High Court took the view that the companytract in question was a companytract for the manufacture and Sale of wagons to the Union of India by the Company and as such sales tax was payable on these transac tions.
Instead of giving any relief, the Sales tax Department informed the Company that it should stop purchasing material on the strength of Form C under the Central Sales tax Act.
Inspecting Authority Joint Direc tor R.I. , R.D.S.D., Calcutta or his repre sentative shall companystitute the Inspecting Authority for the inspection of stock built by you against this order.
67/RS 1 /954/15 dated December 23, 1967, and letter dated June 15, 1968, the Railway Board companymunicated to the Company, the formers acceptance of the offer made by the Company in its earlier letters, including the letter, dated 12 12 1967, to manufacture and supply, G. Bogie companyered wagons BCX Type and M.G. Covered wagon MBC Type.
1,899.29p as penalty.
In March 1967, the High Court of Mysore in the case of Hindustan Aeronautics Ltd., Bangalore Division v. The Commissioner of companymercial Taxes, Mysore, C held that the companytract for the supply of wagons to the Railway Board by HAL was in the nature of works companytract and therefore sales tax was number payable on such supplies.
The numbers of the wagons to be supplied and the price per wagon of each type were indicated in these let ters.
67/Rs 1 /954/15/396, dated 15 6 1968 with the Union of India through the Railway Board for the manufacture and Supply of 258 BG Bogie companyered BCX type wagons and 812 MG companyered wagons of MBC type to the Railways.
underlining ours The balance of 10 percent shall be treated as security for the due fulfilment of the companytract and the Contractor .shall be entitled to receive payment of the balance of 10 per cent on vehicles as companypleted on his receiving a certificate from the Purchaser to the effect that the actual delivery of the vehicles in question has been taken, that the delivery was made in the due time, and that the Contract has been duly fulfilled in every respect in so far as it relates to the company pleted vehicles.
The proce dure for such payment will be as follows 1 The Contractor on receipt of a Certifi cate signed by the Inspecting Officer whose decision shall be final to the effect that one or more vehicles have been companypleted will submit to the Purchaser on account bill for 90 per cent of the value of vehicles in question, together with the companypletion certificate, the Purchaser will pay the 90 per cent bill, and on payment of this bill the vehicles in ques tion will become the property of the Purchas er.
Paragraph 2 of the letter, dated December 23, 1967, stated Terms and Conditions The companytract shall be governed by the General Conditions of Contract A5 51 Revised in so far as these are number inconsistent with the Special Condi tions of companytract attached as per Annexure A and these given in Paras 3 and 7 below.
1,56,703.20 lying in its hands for payment of Sales Tax.
The basic price shall have reference to the specification shown in the order.
The Special Conditions of Contract companytains in Annexure A to the letter dated 23 12 1967, are as under SPECIAL CONDITIONS 1.3 Material Escalations Adjustments due to variations in the companyt of material will be companyfined to the variations in the prices of steel at Col.
3 That an appropriate writ, Directive or order be made directing the respondent Union of India through the Railway Board to reim burse the Petitioners in respect of Sales Tax for the purchases from May 1968 onwards from month to month.
Paragraphs 3 to 6 of the letter provide as under Delivery The delivery of the stock O.R, your works siding is required to be companypleted by 30 6 69.
Packing 01 axle boxes Packing of axle boxes Wherever necessary will be done by Western Railway.
The Company thereupon invoked the writ jurisdiction of the High Court by a petition under Article 226 of the Constitu tion.
Accounting and payments F.A. A.O., Northern Railway, New Delhi will maintain accounts and arrange all payments.
733 of 1968 .
In the writ petition, the Commercial Taxes Officer Special Circle Jaipur, the Union of India through the Rail way Board and the State of Rajasthan were impleaded as Respondents.
CIVIL APPELLATE JURISDICTION Appeal No.
It thus decided the main issue against the Union of India and allowed the writ petition.
1 rate through Governmental action for companytrolled categories and those fixed by J.P.C. for de controlled categories of steel.
While in reply to the Railway Board at Company companytended that the companytract was for sale of wagons and number a companytract for works, it took a companytrary position in its representation to the Commissioner of Sales tax, Rajasthan.
T. Desai, G. A. Shah and S.K. Dholakia, for respond ent No.
Writ No.
1812 of 1969.
At the final hearing before the High Court all the parties requested the Court to resolve the dispute in the exercise of its extraordinary jurisdiction under Article 226 of the Constitution, numberwithstanding the availability of an alternative remedy.
1,91,827/79p.
The escalation would be allowed in respect of such of the quantities of the material which were purchased and paid for the manufacture of wagons on order after the variation in price over the base date and subject to examination of the actual amounts paid for the supply of such tonnage of steel which is companysidered reasonable for the manu facture of the wagons on order and for which prices have varied over the base date whether supplied to the Contractor or sub companytractor Specifications and Drawings The stock shall be built companyforming to specifications and drawings indicated in the order which axe obtainable on payment from the Research Design and Standards Organisation, Lucknow, with such modifications as may be required or approved by the Railway Board, from time to time during the execution of this companytract.
The Court, in companysequence, proceeded to decide the dispute on merits.
In view of this decision, the Railway Board by its letter dated June 7, 1968 informed the Company that the money paid by it to the Company which was number deposited with the Sales tax Department should be re funded because the real nature of the transaction was that of a works companytract and number a sale or purchase and therefore the Railway Board was number liable to reimburse the Company for the amount of sales tax if any, paid by the Company to the State of Rajasthan.
The writ petition was companytested by the Union of India, inter alia, on the ground that the companytract in question was companytract for works and number a companytract of sale.
K. Mehta and Girish Chandra, for the appellant.
M. Singhvi, S.M. Jain and Indra Mapwana, for respond ents 2 3 Leila Seth and G.S. Chatterjee for the Intervener.
The sales tax authorities of the State Respondent 3 herein under the Rajastan Sales Tax Act, levied the sales tax treating the companytract as one of sale and delivery of wagons.
Under a similar past companytract, the appellant reimbursed the Company the amount of sales tax for the wagons supplied by it to the appellant in the months of March and April, 1967.
The Judgment of the Court was delivered by SARKARIA, J. Whether on the facts of this case, the companytract dated 15 6 1968 between the Union of India and the Central India Machinery Manufacturing Company Ltd. Wagon Structural Division Bharatpur hereinatter called tile Company for tile manufacture and supply of wagonS, was a companytract of sale or work companytract, is the principal question mat falls to be determined in this appeal by certificate, field by the Union of India against a judgment dated January 31, 1969 of the High Court of Rajasthan.
1 herein entered into a Contract No.
It arises out of these facts The Company, Respondent No.
There is numberconsolidated companytract deed formally executed by the parties, on record.
