COMMISSIONER OF SALES TAX GUJARAT Vs. ASHA WATCH CO

JUDGEMENT

(1.) THE real question which arises to be considered in this reference is whether the repairing work done by the assessee-opponent M/s. Asha Watch Co. , amounts to a works contract or a composite contract for doing labour work as well as supplying materials.

(2.) SHORT facts which give rise to this reference are as under : The opponent-assessee M/s. Asha Watch Co. , is a firm registered under the Bombay Sales Tax Act, 1959 (hereinafter referred to as "the Act" ). It deals in watches, timepieces and clocks and also undertakes repairing works. On 27th September, 1957, the concerned Sales Tax Officer, on some information, seized the account books of the assessee and thereafter passed assessment orders enhancing the turnover of sales and purchases. He further found that during the assessment years 1954-55 and 1955-56, the assessee had undertaken repair works from different customers and during the course of these repair works, it had utilised certain spare parts for the purpose of carrying out the repairs. The bills, which were supplied by the assessee to these different customers, were composite bills for the labour work done as well as for the materials utilised, but these bills, admittedly, did not specifically state what were the labour charges and what were the charges for the spare parts, which were utilised in carrying out the repairs. So far as the assessment year 1954-55 is concerned, it is for the period from 1st April, 1954, to 31st March, 1953, and the aggregate amount of all the bills prepared by the assessee in this manner comes to Rs. 9,881. So far as the assessment year 1955-56 is concerned, it is from 1st April, 1955, to 31st March, 1956, and the aggregate amount of the bills supplied by the assessee to its different customers comes to Rs. 7,833.

(3.) BEING aggrieved by this decision of the Tribunal, the department has preferred this reference. The Tribunal has referred to this court, the following two questions for opinion :- " (1) Whether on the facts and in the circumstances of the case contracts evidenced by the various bills aggregating to Rs. 9,881 for the assessment period from 1st April, 1954, to 31st March, 1955, and Rs. 7,833 for the assessment period from 1st April, 1955, to 31st March, 1956, enumerating without price the items of spare parts of watches constitute one and indivisible contract of works and labour for repairing work or a composite contract of both labour and sales of aforesaid spare parts under the provisions of the Bombay Sales Tax Act, 1959. (2) If the answer of the first question is that the contract is a composite contract of material and labour whether such sales are liable to tax at their estimated price. "