COMMISSIONER SALES TAX Vs. KANSARI UDYOG SAHAKARI SAMITI

JUDGEMENT

(1.) THIS judgment shall also govern the disposal of Misc. Civil Case No. 120 of 1973 (Commissioner of Sales Tax, M. P. v. Kansari Udyog Sahakari Samiti, Navapara ).

(2.) IN both these references made under Section 44 of the M. P. General Sales Tax Act, 1958, a common question of law, arising out of the Tribunal's common order dated 23rd March, 1971, has been referred for decision of this Court. The question is as under : Whether, under the facts and in the circumstances of the case, the transaction in which the dealer obtained 'kansa' (raw material) from his customers and supplied utensils of the same weight and charged only labour charges will be a sale liable to sales tax under the M. P. General Sales Tax Act, 1958.

(3.) THE relevant period of assessment in these two references is 1st July, 1964, to 30th June, 1965, and 1st July, 1965, to 30th June, 1966. The assessee is a co-operative society registered under the M. P. Co-operative Societies Act, 1960. It is a registered dealer under the M. P. General Sales Tax Act, 1958. The assessee manufactures utensils made of "kansa" (an alloy ). The transactions in question are those in which the society sold "kansa" utensils, after receiving from the customer raw material in the shape of old "kansa" goods. It is not as if the customer supplies old "kansa" goods and that very material is melted and converted into new utensils, which are then delivered to the customer. But for a certain quantity of old "kansa" given by the customer to the assessee, ready-made "kansa" utensils of equal weight are given by the assessee and the money paid in addition is only an amount which may be considered to be labour charges including profit. In short, for the "kansa" utensils transferred by the assessee to the customer, the consideration given by the customer is an equal weight of "kansa" in the shape of old goods plus some money which is considered to be labour charges, including profit. Thus a substantial consideration is an equal amount of "kansa" in the shape of old goods, the money part representing only the labour charges of the assessee in making the utensils. These are the facts found by the Tribunal and the question is whether such a transaction amounts to "sale" under the M. P. General Sales Tax Act, 1958, and is, for that reason, exigible to sales tax.