HEERA ELECTRODES Vs. COMMISSIONER OF SALES TAX

JUDGEMENT

(1.) This is a revision filed by the applicant under Section 11 of the U.P. Sales Tax Act, 1948 against the order of Tribunal dated March 8, 1991 relating to assessment year 1984-85.

(2.) The applicant was a manufacturer of electrode, welding-rods and was also a trader of scrap, iron and steel rods. During the year under consideration, the applicant had entered into a contract on February 28, 1984 with M/s. Gunkar Electrodes Pvt. Ltd., Rampur, for design, manufacture, fabricate and installation of complete machinery and equipment of electrodes plant for Rs. 5,15,000. The claim of the applicant was that the nature of works was works contract and not sale and therefore, the amount received for execution of such contract was not liable to tax. Assessing authority had not accepted the claim of the applicant and treated the agreement as contract for sale and not works contract and accordingly levied tax on the amount of Rs. 5,15,000. Aggrieved by the order of assessing authority, applicant filed appeal before the Assistant Commissioner (Judicial), Sales Tax, Moradabad, which was rejected. Claim of the dealer of works contract was also rejected by Tribunal. Being aggrieved by the order of Tribunal, the present revision has been filed.

(3.) The only question for consideration in the present revision is that whether the agreement dated February 28, 1984 between the applicant and M/s. Gunkar Electrodes Private Limited, Rampur, was in the nature of works contract or contract for sale. A copy of the agreement is annexure 2 to the present revision. It has also been referred in the order of Tribunal. The agreement reads as follows : AGREEMENT This agreement is made at Rampur on this 28th day of February, 1984. M/s. Heera Electrodes, Rampur, having its office near Kosi River Bridge, Rampur, represented by Sri Pradeep Kumar Jain, its partner, hereinafter referred to as the first party. AND M/s. Gunkar Electrodes Private Ltd., Rampur, having its registered office at Jwalanagar, Rampur, and being represented by Shri R.B. Jain, managing director of the company, hereinafter referred to as the second party. Whereas the second party is desirous of getting supplied an electrode plant from the first party, both the parties have entered into the following agreement in this connection :