POTHULA SUBBA RAO Vs. STATE OF A P

JUDGEMENT

(1.) IN these three tax revision cases, the petitioner is the same and they relate to assessments made against him under the provisions of the Andhra Pradesh General Sales Tax Act (hereinafter referred to as "the Act") for the years 1960-61, 1961-62 and 1962-63. As the facts are identical and common questions are involved in the three cases, they can be disposed of by a common judgment.

(2.) THE petitioner was constructing bodies for buses and lorries on the chassis supplied by the customers as per their requirements. With regard to those transactions of building bodies, the turnovers of the petitioner for the years 1960-61, 1961-62 and 1962-63 respectively were Rs. 97,153. 00, Rs. 1,02,950. 00 and Rs. 1,06,796. 00. Treating the transactions as sales with regard to those turnovers, he was assessed to sales tax. He was assessed to sales tax not at the rate of 2 per cent. as was applicable to sales of general goods as provided under the charging section 5 of the Act at the relevant time, but at the rate of 7 per cent. as provided under item 7 of Schedule II of the Act, presumably on the basis that the bus and lorry bodies would come under component parts of motor vehicles. The case of the petitioner is that the transactions which he entered into for building bus and lorry bodies on the chassis supplied by the customers do not amount to sales and they are works contracts only and therefore they are not exigible to sales tax. The further contention of the petitioner is that even assuming that the transactions amount to sales, they are liable to tax only at 2 per cent. as provided in the charging section 5 of the Act as the bus and lorry bodies would come under general goods only and they cannot be said to be component parts of motor vehicles. All the Tribunal provided under the Act, namely, the Deputy Commissioner Tax Officer, the primary assessing authority, on appeal the Assistant Commissioner of Commercial Taxes and on further appeal the Sales Tax Appellate Tribunal concurrently found against the petitioner on both the points. Sri W. V. V. Sundara Rao, the learned counsel for the petitioner, has urged before us the same two points on behalf of his client.

(3.) THE question we have to determine first is, whether there is any sale of goods in a transaction like the one mentioned above so that the provisions of the Act may be extended thereto. The State Legislature has no competence to tax "turnovers" which are not sales but relate only to "works contracts". The expression "sale of goods" is not to be construed in its popular sense but it must be interpreted in its legal sense and should be given the same meaning which it has in the Sale of Goods Act, its essential ingredients being an agreement to sell movables for a price and the property passing therein pursuant to that agreement. In the case of contracts for building bus and lorry bodes, it may not be possible to say that there is a sale of bodies in the popular sense of the terms "sale". But as mentioned above, it has to be construed from the point of view of its legal sense rather than from its popular sense. The definition of the term "sale" as defined in section 2 (n) of the Act, to the extent material for our purpose, is as follows :