SUNDARAM MOTORS PRIVATE LIMITED Vs. STATE OF MYSORE

JUDGEMENT

(1.) In this sales tax revision petition the only point for consideration is, whether the petitioner-assessee has been rightly made liable for sales tax in respect of two sums of money, viz., Rs. 24,713.90 and Rs. 2,408.43. The former is a figure culled out from a total of Rs. 3,77,149.64 representing the total of the bills for repairs of motor vehicles. The other amount, viz., the sum of Rs. 2,408.43, is the cost, according to the books of the assessee, of nuts and bolts purchased by him and utilised for the exclusive purpose of carrying out certain items of repairs.

(2.) The assessee carries on more than one department of business. One of them is for the sale of motor spares and the other is repairing and servicing of motor vehicles. When for the purpose of carrying out any repair job it becomes necessary to replace any spare part which could be supplied from out of the stock held by the assessee in his spare parts department, the said supply of the spare part is treated as a separate sale made by him to the customer and actually submitted for assessment to sales tax. But the position in regard to items covered by the aforesaid sum of Rs. 24,713.90 is different. In cases where the defect in the motor vehicle under repair cannot be rectified by the substitution of the defective part by a part available in the spare parts department, the assessee himself manufactures or fabricates the parts necessary, expending the raw material purchased by him for the purpose and investing labour for the purpose of fabrication. The total cost to him of the raw material as well as the labour is generally found set out as one of the debits in the bill for repairs he prepares in respect of the particular job. It is because the bill is so itemised and the items representing parts actually fabricated by the assessee for the purpose of the job are separately stated with necessary particulars, the assessing authority was able to pick out these items and proceeded on the footing that they should be regarded as separate transactions of sales attracting liability to sales tax. The position in regard to the sum of Rs. 2,408.43 is slightly different. Nuts and bolts covered by the said sum are manufactured items purchased by the assessee himself as manufactured items and stored. Whenever it becomes necessary for him for the purpose of repair work to use the nuts and bolts, he takes them out of his stock and uses them for the said purpose. The sum of Rs. 2,408.43 represents the value of nuts and bolts taken by him from out of his stock and utilised for various repairs carried out by him during the period of accounting relevant to this assessment. In this case also the fundamental assumption on the basis of which the authority has treated this amount as part of the turnover assessable to sales tax is that utilisation of the nuts and bolts for the purpose of repairs must be regarded as a separate sale by the assessee of the said nuts and bolts. The question of law is whether the said basis on which the assessing authority has proceeded is sustainable in law.

(3.) So far as the assessing authority himself is concerned he appeared to have had no doubt whatever in his mind. He disposed of the matter as follows :