Judgment S. C. Misra and j. JJ. 1. The opposite party, M/s. Indian Cable Co. , Ltd. , Calcutta, has its place of business in Bihar at Tatanagar for manufacture of equipments of electric fittings such as cables etc. The company is registered under the Central Sales Tax Act, 1956, in Bihar in respect of its factory at Tatanagar. It also holds two registration certificates under the Bihar Sales Tax Act, 1959. Notice was issued to the company under Sec.16 (2) of the Bihar Sales Tax Act, 1959, read with Rule 12 of the Central Sales Tax (Bihar) Rules, 1957, in response to which complete books of account were produced by the assessee-company. It also filed the revised returns in respect of the quarters ending 30th June, 1960, 30th September, 1960, and 31st March, 1961. On a verification of the original return as also the revised returns filed by the company, its gross turnover for the year 1960-61 was found to be Rs.4,52,01,270.25. Out of this gross turnover, the sale of the company within the State of Bihar was found to total a sum at Rs.66,94,568.20. This had to be deducted accordingly out of the amount of the turnover on which Central sales tax had to be levied. The amount exigible for Central sales tax was fixed at Rs.3,85,06,702.05, making other deductions which need not be referred to. The Assistant Superintendent of Sales Tax, Central Circle (Bihar), Calcutta, held that the amount at which the Central sales tax would be payable by the dealer would be Rs.3,79,72,677.70. According to the final return of the dealer, however, the figure stood at Rs.3,77,05,553.62. Thus, the difference between the amount determined by the assessing authority and that of the return filed by the dealer was a sum of Rs.2,67,124.08. The dealer claimed deduction of this amount as well on the ground that this represented the amount received from M/s. Hindustan Steel Ltd. s iron ores in the district of Barsua in Orissa. The amount was paid to the dealer by Hindustan Steel Ltd. under an indivisible works contract and as such could not be included in the gross turnover in view of certain judicial pronouncements. The amount was paid to the dealer by Hindustan Steel Ltd. under an indivisible works contract and as such could not be included in the gross turnover in view of certain judicial pronouncements. The moot point between the department and the dealer, therefore, was the construction of the terms of the contract entered into between the dealer and the Hindustan Steel Ltd. The dealer produced a copy of a schedule to the acceptance of tender with regard to job No. C 753 and also copies of six invoices relating to the said order. The two contracts are: (1) contract No. P/e2/1887/3869, dated the 23rd December, 1957, and (2) contract No. P/eiv/4397/78, dated the 23rd December, 1959. One contract related to designs, supply and execution of the power supply system at Barsua Iron Mine and the second contract was for supply and erection of cabling work of electrical equipments for the ore handling plant at Barsua Ore Mine. According to the dealer, both the agreements evidenced by these two contracts were part and parcel of one transaction and partook of the character of a works contract by which the assessee was required to instal the power supply system at Barsua Iron Ore Mine as also for execution of cabling work of electrical equipments for the ore handling plant there. Whether the two agreements were part and parcel of the same transaction or they were different transactions, although some argument was raised on this point as well, is not of any material importance in this case. 2. The only question, therefore, is whether the terms set out in the two agreements for supply of materials stood independent of the execution and erection of the power supply system and cabling work. It is conceded that according to the well settled principle if the taxing authorities could come to the conclusion that the supply of materials was an essential part of the erection of the electrical system, the supply of materials could not be construed as a sale by the contractor to the customer of those commodities and, if that not be construed as a sale, the question of payment of sales tax whether Central or Bihar would not arise. If, on the contrary, the supply of materials be regarded as standing apart from the use of the materials in putting up the electrical system, and title to the property would pass to the customer apart from the actual work being done, then the correct rule of law would be that sales tax would be payable in respect of the materials as has been held by the Assistant Superintendent of Sales Tax, Calcutta, the assessing authority in the present case. It may be stated that the order passed by the assessing authority was upheld on appeal by the Deputy Commissioner of Sales Tax. On revision being filed against this, however, by the assessee, the Commercial Taxes Tribunal, Bihar, by judgment dated the 18th of July, 1966, disagreed with the conclusion arrived at both by the Assistant Superintendent, Sales Tax, as also by the Deputy Commissioner of Sales Tax. According to the Tribunal, a careful scrutiny of the various terms of the agreements would lead to the conclusion that there was no independent transaction of sale in this case but that the assessee was required as part of a complete contract to supply materials as also to execute the necessary installation for which the amount stipulated in the contract had to be payable by the Hindustan Steel Limited to the assessee. 3. The department filed an objection in the High Court praying that the court should direct the Tribunal to make a reference of the case to this court and, on an order being passed, the case was stated under Sec.33. (3) of the Bihar Sales Tax Act, 1959, by the Tribunal. The questions formulated by this court for reference by the Tribunal stand thus: (1) Whether on a proper construction of the contract documents and other attendant circumstances, it ought to have been held that the contract was divisible and sale of goods worth Rs.2,67,124.08 was rightly assessed to Central sales tax by the Assistant Superintendent of Sales Tax, Central Circle, Bihar, by his order dated 10th June, 1963? (2) Whether the order of the Tribunal that the State of Bihar cannot impose any sales tax on the dealer in respect of sale of switchgear manufactured by Jyoti Galor Emeg. Ltd. for Rs.1,02,185 is legally valid ? (2) Whether the order of the Tribunal that the State of Bihar cannot impose any sales tax on the dealer in respect of sale of switchgear manufactured by Jyoti Galor Emeg. Ltd. for Rs.1,02,185 is legally valid ? Reliance was placed on behalf of the Commissioner on the State of Madras V/s. Gannon Dunkerley [1958] 9 S. T. C.353 (S. C.) and Government of Andhra Pradesh V/s. Guntur Tobaccos Ltd. [1965] 16 S. T. C.240 (S. C.) The Tribunal while dealing with the prayer of the department for making a reference, which prayer was rejected by it, has proceeded upon the footing that so far as the principle of law applicable to the facts of the case is concerned, the position is settled beyond doubt. The difference may arise only in applying the principle to the facts of a particular case for which purpose a clear analysis will have to be made of the terms between the parties leading to the transaction based on execution of any work by a contractor at the instance of the other party interested in the execution of the work concerned. It is material, therefore, to refer to the ground on which the Tribunal rejected the prayer. It is that the facts found by the Tribunal in its order dated the 23rd July, 1965, led to the conclusion that in the circumstances of the present case the contract was an indivisible one for erection of a power supply system as also for cabling work of electrical equipments for the ore handling plant at the Barsua Ore Mine for a lump sum and that there was no separate contract for the sale of materials. The point formulated on behalf of the department, therefore did not give rise to any question of law but it was only a question of inference as to the character of the transaction from proved facts. If that question, therefore, would be allowed to be referred to the Honourable High Court, it will mean that the inference drawn by the Tribunal from these basic facts was unsound. This would relate to the appreciation of evidence and would not raise a question of law which only could be referred. In regard to the other question which related to the sale of switchgear manufactured by Jyoti Galor Emeg. Ltd. , that switchgear was despatched from Baroda to Barsua which place is situate in Orissa. This would relate to the appreciation of evidence and would not raise a question of law which only could be referred. In regard to the other question which related to the sale of switchgear manufactured by Jyoti Galor Emeg. Ltd. , that switchgear was despatched from Baroda to Barsua which place is situate in Orissa. Since tax could be payable under the Central Sales Tax Act by any dealer only on the goods sold by him in the course of inter-State trade or commerce, and it shall be levied and collected in the State from which the movement of the goods commenced, the State of Bihar having no concern with the despatch of this switchgear from Baroda to Orissa, this transaction was not subject to Central sales tax. This too, therefore, was a pure question of fact and, obviously, the State of Bihar would not be entitled to impose sales tax on the sale of the switchgear. This was a simple point and did not require to be referred to the Honourable High Court and it must be held that the view of the Tribunal on this question was right. 4 It may be stated that learned counsel for the State has not thought it fit to argue the question in regard to the switchgear despatched from Baroda to Barsua in Orissa. He has, however, argued the only question that the Tribunal was in error in thinking that the question involved in this case was a question of fact. The High Court has to draw an inference from proved facts mainly from the two agreements between the parties as to whether the supply of materials by the assessee in this case was in the nature of a sale for which specific price was shown in respect of each item in the agreement or in respect of such recital the supply would nevertheless be treated as part and parcel of an indivisible agreement between the two contracting parties. According to the respondent, it is true no doubt that price of each one of the materials supplied was set out in the agreement and it has also been stated that 80 per cent. According to the respondent, it is true no doubt that price of each one of the materials supplied was set out in the agreement and it has also been stated that 80 per cent. of the price would have to be paid before the completion of the work and within one month from the date of arrival of the materials at the work site and only the balance would be paid after the completion of the work. This, however, was done only for the purpose of on account payment and not to dissociate the supply of materials from execution of the work. Learned Advocate-General has placed reliance mainly upon the decision in the case of Commissioner of Sales Tax, Maharashtra State V/s. Arun Electrics [1965] 16 S. T. C.385 from which extensive quotation was given in the application of the department for reference of the question formulated on its behalf by learned counsel. The following observation in that case may be reproduced: what has happened at the end of the contract is that the customer has got the goods ordered by him and he has in addition thereto got also the work done of fixing the goods at the appropriate places as desired by him. There can be no doubt whatsoever that a customer if he had so desired could have purchased the goods from one person and thereafter could have entrusted the work of fixing them to some other person and could have obtained the same results as he has done in the present case. If he had followed the latter procedure there could be no doubt whatsoever that there had been a purchase of electrical goods by him which were afterwards fixed by him in his house by employing a person who was competent to do the work. Does it make any difference if, instead of following this procedure, he has obtained the goods from the same person to whom he has also entrusted the work of fixing them It appears that it would not, because at the end of the contract the property has eventually passed in the very goods which under the contract had been agreed to be purchased. The contract, in our opinion, was intended to result in the sale of electrical goods, which were required by the customer for his house, although there was, in addition to the said sale, further work also required to be done by the supplier of the goods in fixing the same in the house of the customer. It is not a case where we can say that by reason of the work and labour bestowed or the manner in which the work was done, the result is anything which cannot be the subject of the sale. Reference was made to the reasoning adopted by the Assistant Superintendent of Sales Tax on foot of the two agreements that "there were clear stipulations in the contract for the sale of specified equipments and their components on determined prices and in pursuance of the contract for sale, the goods were consigned and delivered to the indentor, much before these equipments were installed, for which remuneration was separately agreed to between the parties. " Reference was also made to the entry in the invoices that the dealer has charged Central sales tax at the full rate of seven per cent. from the indentor. Learned Advocate-General has also referred to the factum of categorisation of the various items of articles together with the prices mentioned in the two agreements, which would show that the parties intended actual sale of the goods which the respondent-opposite party would be required to put through in the electrical installation. He has also referred to the recital in the agreements of the consequence of variation in the prices of articles which would affect the actual amount payable under the contract as also to the fact that the property in the goods passed when they were taken to the work site. In support of his contention, he has also relied upon the well known decision in the State of Madras V/s. Gannon Dunkerley [1958] 9 S. T. C.353 (S. C. ). It is sufficient, however, to refer to a later decision of the Supreme Court in Carl Still G. m. b. H. V/s. The State of Bihar A. I. R.1961 S. C.1615 which has noticed the earlier decision in the case of the State of Madras V/s. Gannon Dunkerley. The facts of that case are also similar to the facts of the present case. The facts of that case are also similar to the facts of the present case. In that case also there was a clause [clause 15 (ii)] by which all materials and plant brought by the contractor upon the site under the German and Indian Sections in connection with the construction of the coke oven and by-products plant immediately they were brought upon the site were to become the owners property and the same could not on any account whatsoever be removed or taken away by the contractor or any other person without the owners prior authority in writing. Such of them as during the progress of the works would be rejected by the owner in accordance with the terms agreed upon between the contractor and the owner in this respect shall on such rejection, cease to be the owners property. The owner was not liable for any loss or damage which might happen to or in respect of such materials and plant by the same being lost, stolen or injured or destroyed by fire, tempest or otherwise for which the contractor would be liable. The owner agreed that after the coke oven and by-products plant had been constructed according to the agreed terms, the contractor was entitled to remove from the site their tools, tackles, machines, packing materials, protection roof and other materials as may be surplus to the requirements of the normal operation of the coke oven and by-products plant provided that no claim for increased cost was made in respect of anything so removed. In that case a reference was also made to the decision of the Supreme Court in Peare Lal Hari Singh V/s. The State of Punjab A. I. R.1958 S. C.664, where also the terms were similar to those which were found in the above case of Carl Still G. m. b. H. A. I. R.1961 S. C.1615, and it was held that the object of such recital was only to ensure that materials of the right sort were used in the construction and not to constitute a contract of purchase of the materials separatim (vide page 1619 of the report ). The crucial point in determining the character of such transaction laid down in that judgment was that there must be a clear contract of sale of the very goods in which eventually the property passed and not merely recital of prices etc. The crucial point in determining the character of such transaction laid down in that judgment was that there must be a clear contract of sale of the very goods in which eventually the property passed and not merely recital of prices etc. in an incidental manner. The Tribunal has referred to Article 31 of the General Conditions of Contract providing the procedure of the final acceptance and taking over of the structures after completion of the work. This article lays down: on completion of the completed structures and testing of each installed group of equipment the contract work shall be inspected for preliminary acceptance. It further lays down that the contract work shall be finally accepted if proof is rendered of integrated operation over the period of three months for the general works and the particular contract works are capable of meeting the stipulated performance requirements. There is a further provision in Article 31 that the plant shall be deemed to have been taken over by the Hindustan Steel Private Ltd. , when they would certify in writing that the plant fulfilled the contract conditions. On a consideration of these circumstances, the Tribunal held that the property in these materials passed only once along with the delivery of the entire power system and erection of the cabling work of electrical equipments for the ore handling plant of the Barsua Ore Mines. It may be mentioned that in Clause 12 (j) of the contract, it is mentioned that cement would be supplied by the purchaser f. o. r. Barbil and recoveries for the same will be made from the contractors bill at the controlled rates ruling on the date of tender, i. e. , 8th June, 1957, plus ten per cent. thereof. This is a significant recital which says that even where material in part is supplied by the purchaser, nevertheless this will be included in the contractors bill. If the dominant intention of the parties were that materials would be sold to the purchaser and then the works contract would be done by the assessee, there would be no point in including in the contractors bill even the price of the materials supplied by the purchaser itself, being the Hindustan Steel Ltd. This is a very significant recital in the agreement. In view of this, it is not necessary to refer in detail to the following decisions which have been cited at the Bar in support of the respective contentions by learned counsel for the parties: The State of Madras V/s. Voltas Limited [1963] 14 S. T. C.446, Patnaik and Company V/s. The State of Orissa [1965] 16 S. T. C.364 (S. C.), Mckenzies Ltd. V/s. The State of Maharashtra [1965] 16 S. T. C.518 (S. C.), Richardson and Cruddas Ltd. V/s. The State of Madras [1965] 16 S. T. C.827, Arun Electrics, Bombay V/s. Commissioner of Sales Tax, Maharashtra State [1966] 17 S. T. C.576 (S. C.) and Commissioner of Sales Tax V/s. Habibulla Saheb [1968] 22 S. T. C.219. 5. In the result, therefore, it must be held that the Tribunal took the correct view in construing the contract between the parties as works contract and as such not exigible to sales tax under the Central Sales Tax Act. Question No. (1) also thus submitted to the High Court by the Tribunal must be answered in favour of the assessee and against the department. There will be no order as to costs.