EASTERN ENGINEERING WORKS Vs. STATE OF MYSORE

JUDGEMENT

(1.) The source of these two revision petitions is the exercise of revisional power by the Deputy Commissioner of Commercial Taxes under section 21(2) of the Mysore Sales Tax Act in respect of an assessment made by the Commercial Tax Officer for the years 1960-61 and 1961-62.

(2.) The petitioner before us is a dealer called the Eastern Engineering Works. There was a contract between the petitioner and other concerns for the installation of electrical fittings, which, according to the finding of the Deputy Commissioner, "involved supplying and fixing of electrical goods". The further finding of the Deputy Commissioner was that the dealer charged the customers "consolidated rates for the materials consumed and the labour charges involved in carrying out such contracts." The Commercial Tax Officer accepted the plea of the petitioner that there was no sale of the goods used or consumed in the execution of the contracts, and his finding was that the contracts were works contracts. But the Deputy Commissioner thought that the contracts consisted of distinct and severable contracts - one for the supply of goods and the other a works contract. The Deputy Commissioner stated in the course of his order the nature of the investigation which he made under section 21(1) thus :- "Considering the nature of the contracts executed by the assessee-concern and after examining the books of accounts and other documents produced, a notice was issued proposing to treat the supply of electrical goods consumed in carrying out such contracts as first sales made by the assessee-concern in so far as they relate to inter-State purchases."

(3.) On the basis of his conclusion that the contract could be separated into two portions, one relating to the work executed and the other involving the sale of goods consumed in the execution of the works, the Deputy Commissioner altered the assessment and directed the Commercial Tax Officer to issue demand notices accordingly.