AI Structured Summary
Not yet generated for this judgment
Judgment
S. MOHAN, Offg. C.J.
The short question in all these cases is whether the body built the chassis of station wagon or autorickshaws which had already suffered sales tax
is liable to be taxed in terms of Schedule I item 3 of the Tamil Nadu General Sales Tax Act as it stood prior to the amendment ?
The contention of Mr. Govindswaminadhan, learned counsel for the petitioners, is that the body built to be fitted on the chassis has already
suffered sales tax and, therefore, there is no scope for taxation again. This contention was overruled by the assessing authority as well as the
Tribunal on going through the various invoices produced.
What is now urged before us is that in so far as the petitioners have to supply only the finished product as a motor vehicle namely station wagon
or autorickshaw, if the chassis alone is supplied and the body is build by somebody else on which chassis the body is fitted, there cannot be any
liability for sales tax. The contract is for supply of finished product namely station wagon or autorickshaw. The Tribunal erred in relying on the
decision in Rane (Madras) Ltd., Nadakkavu, Kozhikode Vs. State of Kerala, . This is the only contention raised before us.
We have very carefully considered the argument. In this case, admittedly, the contracts with the purchasers were not produced by the assessee.
By way of sample we will only reproduce the invoice :
SOUTH INDIA AUTOMOTIVE CORPORATION PRIVATE LTD.,
24, WHITES ROAD, MADRAS - 600 014.
No. L. 1380. Dt. 15-4-1970
M/s. Ravin Trading Co.,
193, Mount Road,
Madras-2.
Particulars Amount
Lambretta LI 175 Model Scooter/
3 Wheeler Van bearing Engine
No. 003646 Frame No. 003485.
Registration No. MSL. 702 complete
with all tools and equipments 4,234.11
Extra cost for speedometer 82.00
Excise duty 446.56
Spare wheel tyre and tube with bracket 95.86
Locally built cab with windscreen 846.82
Surcharge 162.25
Transport charges from Bombay to
Madras including transit insurance,
clearing charges, etc. 265.00
-----------
6,132.60
Sales tax 15% 919.80
Registration 15.00
Painting No. Plates 10.00
Cost of body building 1,805.50
-----------
Total 8,883.00
-----------
(Rupees eight thousand eight
hundred and eighty-three only)
For South India Automotive
Corporation P. Ltd.
(Sd) ......
Office Manager
(TRUE COPY)
INVOICE ORIGINAL
ANNAMALAI AUTO SERVICE, MADRAS-1
No. AR. 504 10-4-1970
M/s. South India Automotive
Corporation Pvt. Ltd.,
24, Whites Road, Madras-14.
As per your purchase Order No. 770, dt. 9-3-1970
Part No. Amount
Construction charges of an open
type van body on one Lambretta
three wheeler chassis bearing the
Engine No. 003646 Chassis No. 003485 1,300.00
------------
1,300.00
Sales tax 13% 139.00
------------
1,469.00
------------
(Rupees one thousand four hundred
and sixty-nine only).
(TRUE COPY)
On this basis it was argued that the body having suffered sales tax, there is no possibility of taxing it over again. We are afraid, it is not the way
to look at the matter at all. As rightly pointed out by the Tribunal, the contract is for the delivery of station wagon or autorickshaw. It is worthwhile
to quote verbatim the order of the Tribunal which is as follows :
In the cases wherever they were produced, the orders were for supply of finished van or autorickshaw. There was no specific agreement for the
supply of a chassis separately and then to construct a body on it. In fact, in certain cases, where the customer placed order for chassis of three
wheelers, the appellants stated that they did not entertain orders for chassis and got the orders amended. In certain cases, where the customer
replaced orders for autorickshaws but subsequently on account of delay in supply, wanted only chassis, the appellants kept silent over such letters
and supplied only autorickshaws after collecting the full agreed price. The letter written to the customers in some cases indicate that even after the
cost of chassis was collected as advance payment and the bodies were built, the appellants retained the right of allotting the autorickshaws to the
next person in the priority list if the full payment was not made and delivery taken within two weeks of the intimation. Where the cost of the chassis
was collected it was treated as advance against the value of the finished van or autorickshaw. The chassis were allotted and sent to the body
builders in some cases after the full payment was realised and in some cases even before any part payment was received. Thus the allotment of
chassis had no relationship with the payment of the value of the chassis. At the time when the customers placed their orders, the appellants were
not in possession of the chassis. The chassis were received from the manufacturers long after the orders were booked by the appellants. In every
case, the intimation sent to the Deputy Commissioner of Police (Traffic and Licensing), Madras under the provisions of the Motor Vehicles Act
revealed that there was sale of a finished vehicle.
As rightly pointed out by the Tribunal there are no materials to support the contention as advanced before us that the sale of the chassis and the
construction of the body are two different transactions. Orders of the customers were only for finished vans. If, this be the factual position, the fact
that the body had suffered tax earlier is of no consequence. The question is whether the sale was of the finished vehicle or that of two independent
goods namely the chassis and body. In this connection the ruling in Rane (Madras) Ltd. v. State of Kerala [1982] 21 STC 420 (Ker) becomes
very relevant, and rightly it was relied on by the Tribunal. We are unable to see any infirmity in the order. The tax revision cases are dismissed. No
costs.
Petitions dismissed.