A R BROTHERS Vs. GOVERNMENT OF TAMIL NADU

JUDGEMENT

(1.) THE assessee in this case agreed to supply to the Superintending Engineer, P.W.D., Madurai Circle, auditorium chairs for the Auditorium Block in the Madurai Agricultural College at Othakadai, Madurai. THE notice calling for tenders giving the item of goods to be supplied is as follows :

(2.) 140 Providing formica sheets ... ... ... ..." Nos. with all necessary fittings to the ends Spl. of the chairs to the required size, etc., complete. There were special conditions relating to this work. Clause 2 provided that the chairs should be supplied to the section stores at site of work at Madurai Agricultural College. Othakadai, and clause 6 required a sample of the chair to which the tenderer offered rates to be furnished to the department. The assessee tendered to supply the chairs at the rate of Rs. 75 per chair. This tender was accepted. The assessing officer sought to tax the amount paid for the chairs. The assessee contended that it was not liable to be included in the taxable turnover as the fabrication and supply of the chairs amounted to a works contract. This contention of the assessee was rejected by the assessing officer as well as the Appellate Assistant Commissioner and the Tribunal.In this revision petition, the learned counsel for the assessee contended that as per the contract, it was to make chairs according to the specifications and then fix the same in the auditorium, that the contract was a composite contract for fabrication, supply and erection of the auditorium chairs and that, therefore, it was a works contract and the turnover relating to the same could not be included in the taxable turnover. In this connection, he referred to the decision of the Supreme Court in Vanguard Rolling Shutters & Steel Works v. Commissioner of Sales Tax and some of the other decisions of the Supreme Court and this Court. In all these decisions, supply and erection of doors or windows in a building were considered to be works contract. But, as pointed out by the Supreme Court in Union of India v. Central India Machinery Manufacturing Co. Ltd. the question whether a contract is one for sale of goods or for executing works or rendering services, is largely one of fact, depending upon the terms of the contract, including the nature of the obligations to be discharged thereunder and the surrounding circumstances.