MATHER AND PLATT LTD Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) The proceedings from which this reference has arisen were initiated by the applicants by means of an application under section 27 of the Bombay Sales Tax Act, 1953, before the Deputy Commissioner of Sales Tax for the determination of the question as to whether any tax was payable by the applicants on their contract dated 6th June, 1959, with Messrs Aryodaya Ginning and Manufacturing Co. Ltd., for the installation of their patented automatic plant for protection against fire. The Deputy Commissioner came to the conclusion that the transaction essentially consisted of two contracts one for the supply of materials for consideration, and the other for services rendered and labour done, and he, therefore, held that sales tax was payable to the extent to which the said contract involved the rule of materials. On the matter being taken up to the Sales Tax Tribunal, that view of the Deputy Commissioner was upheld, and the appeal before the Tribunal was dismissed. The applicants then applied to the Sales Tax Tribunal for referring several questions formulated by them to this court, but the Tribunal, by its order dated 23rd September, 1964, referred only the following two questions to this court for decision :

(2.) It may be mentioned at the very outset that the second question set out above has not been pressed before us, and it is, therefore, unnecessary for us to answer the same.

(3.) The first question referred to us embodies a question which is of frequent occurrence, viz., whether the contract in the present case, which admittedly involved both work and labour as well as materials, was a contract which was intended by the parties to be divisible, as has bean held by the Tribunal in the present case. It may be mentioned that it is not the contention of Mr. Banaji for the taxing authorities that it is a pure contract for the sale of goods. In order to determine that question, it will be necessary for us, in the first instance, to see what, on the documentary evidence, which is the only evidence in the present case, was the nature of the contract between the parties, and what was the intention of the parties in arriving at that contract.