SUNDARAM MOTORS PRIVATE Vs. STATE OF MADRAS

JUDGEMENT

(1.) THESE tax revision cases are filed under Section 12-B (1 ). and Rule 13 (c) (1-A)of the Madras General Sales-tax Act. The assessee is the petitioner in all these cases and they relate to assessments in respect of years 1949-50 to 1952-53. Sundaram Motors (Private) Ltd. , the assessee, is a private limited company incorporated under the Indian Companies Act, and it carries On business in selling and distributing motor vehicles. It also deals in motor parts and accessories and maintains a workshop where reconditioning or repairs of motor vehicles are undertaken. The turnover in the business of the company would therefore relate to the sales department, where the goods are sold, and also the works department, where the vehicles are repaired or reconditioned. In the latter case the turnover would represent not merely the labour charges as such but the cost of spare parts or materials supplied or used in effecting the repairs. There is no controversy in regard-to the turnover in the sales department and these revision cases are concerned mainly with the transactions in the workshop department of the company.

(2.) ALTHOUGH the turnover for the various as sessment years vary, the nature of the business and the question to be decided in the cases are the same. It would be convenient for the purpose of deciding the question involved if the assessment for the year 1949-50 is taken as" a typical one. For that year the Deputy Commercial tax Officer assessed the turnover of the company in a sum of Rs. 42,13,684/13/9. Out of that sum the Officer allocated a sum of Rs. 2,63,462/6/9 as turnover In respect of works contracts referable to repairs of motor vehicles in the workshop. He deducted a sum of Rs. 46,874, therefrom on account of sums charged for services pure and simple. He held that the balance of Rs. 2,16,548/6/9 should be treated as turnover in respect of works contracts and levied a tax on 70 per cent, thereof as representing the sales of materials to the customers while executing the works, repairs etc. On appeal the Special Commercial Tax Officer held that out of the sum of Rs. 2,16,548/6/9 (1) Rs. 127765 would represent pure labour charges, (2) Rs. 73,627 would represent works involving transfer of property, and (3) Rs. 15158 would represent charges for the manufacture of spare parts. He taxed seventy per cent, of item 2 at 3 pies per rupee and the whole of item 3 at nine pics per rupee. The assessment was taken up on appeal to the Sales-tax Appellate Tribunal. Substantially two questions were raised before the Tribunal and they Were : (1) in regard to the validity and proper rate of levying tax on the sales-tax collected by the asses-see and (2) the proper method of assessing workshop transactions. The appellate Tribunal held that the assessee was liable to pay sales-tax on the sales-tax collected by them and that the rate of levy adopted by the department was correct. On the second question it held that the department correctly assessed works contracts at 70 per cent, of the turnover. In the result the order of the Special commercial Tax Officer was confirmed. Thereupon the assessee has preferred these tan revision cases in respect of the assessment lor the four years stated above.

(3.) THE learned Advocate for the assessee did not contest the correctness of the finding of the Appellate Tribunal in regard to the tax liability on the sales-tax collected by the assessee and also as regards the rate of levy in view of the decisions reported in the State of Madras v. Bangalore Automo-biles, 1956-7 STC 537 : (AIR 1957 Mad 6821 (A) and Sundararajan and Co. Ltd. v. State of Madras, 1956-7 STC 105: ( (S) AIR 1956 Mad 298) (B ).