Judgment Shivanugrah Narain, J. 1. These two tax cases arise out of the common order dated 11th November, 1967, of the Commercial Taxes Tribunal, Bihar, passed in Revision Cases Nos.171 and 172 of 1966, by which the Tribunal aforesaid affirmed, with some modifications, the order dated 27th January, 1964, of the Deputy Commissioner, Commercial Taxes, Sales Tax, Chhotanagpur Division, Ranchi, by which he set aside two orders of the Superintendent, Commercial Taxes, Hazaribagh Circle, by which the learned Superintendent had assessed the petitioner-company, the General Electric Company of India (P.) Limited, to sales tax and also imposed a penalty, one for the period 1st April, 1956, to 30th June, 1959 and the other for the period 1st July, 1959, to 31st July, 1961. As the question of law which has to be answered in both the tax cases is the same, both these tax cases were heard together and this order will govern them both. 2. The relevant facts are these : (a) The dealer, the General Electric Company of India (P.) Limited (hereinafter called "the dealer"), carried on the business of manufacture, sale and also of installation of electrical goods and equipments through its expert technicians employed by it. During the relevant period in pursuance of agreements with the Indian Explosives Limited, it supplied and installed for monetary consideration electrical goods and/or equipments in the buildings at Gomia belonging to the Indian Explosives Limited. On the basis of a report dated 24th December, 1959, the Superintendent, Commercial Taxes, Hazaribagh Circle, initiated proceedings under Sec.13 (5) of the Bihar Sales Tax Act, 1947, for the period 1st April, 1956, to 30th June, 1959 and under Sec.16 (5) of the Bihar Sales Tax Act, 1959, for the period 1st July, 1959, to the date of hearing. On the basis of a report dated 24th December, 1959, the Superintendent, Commercial Taxes, Hazaribagh Circle, initiated proceedings under Sec.13 (5) of the Bihar Sales Tax Act, 1947, for the period 1st April, 1956, to 30th June, 1959 and under Sec.16 (5) of the Bihar Sales Tax Act, 1959, for the period 1st July, 1959, to the date of hearing. After giving the dealer an opportunity of being heard and rejecting certain contentions on behalf of the company, which were abandoned at the appellate stage and, therefore, need not be mentioned, the learned Superintendent held that the dealer had sold electrical goods to the Indian Explosives Limited, Gomia and got them installed through its experts at places required by the Indian Explosives Limited ; that from the list submitted by the dealer showing the payments made to the dealer by the Indian Explosives Limited for the aforesaid supply and installation of electrical goods, it was not clear whether the amounts also included payments for labour charges and, as the dealer failed to furnish figures separately for supply and labour charges in spite of repeated demands, the claim for any deduction from the aforesaid payments on account of labour charges could not be scrutinised and, therefore, could not be allowed. The learned Superintendent, accordingly, assessed the dealer on the gross turnover determined on the basis of the figures contained in the list of payment without making any deductions on account of labour charges for the period 1st April, 1956, to 30th June, 1959. By another order of the same date, the learned Superintendent passed a similar order of assessment in respect of the period 1st July, 1959, to 31st July, 1961 ; (b) Appeals against both the aforesaid orders of the Superintendent were preferred by the dealer. The contention advanced in both the appeals on behalf of the dealer was that the contracts under which the dealer supplied the electrical goods and installed them in the buildings of Indian Explosives Limited were works contracts and not contracts of sale and that the contract was one and indivisible and did not consist of two separate contracts, one for performing the work and another for sale of goods and, therefore, the amounts received by the dealer were not received by way of consideration for any sale and were, therefore, not exigible to sales tax. Documents regarding three contracts, namely, contracts Nos.1117, 1225 and 3066 said to be specimen contracts were produced before the appellate authority and it was argued that the examination of their terms bore out the aforesaid contention on behalf of the dealer. The learned Deputy Commissioner, who heard both the appeals and disposed of them by a common order dated 27th January, 1964, held that the assessing officer was unable to examine papers and documents relating to all the contracts except three and that in order to decide the taxability of the transactions, it was necessary that the nature of each contract was examined in detail; and that test check of a few contracts was not enough and, after pointing out that only three contracts were produced before him also, remanded the case to the assessing officer for fresh assessment after giving the dealer an opportunity of producing all contracts, tenders, bills thereof and the learned Deputy Commissioner also recorded his finding and comments relating to the three contracts produced before him and directed that "his findings and comments relating to those contracts should be followed in deciding the taxability of transaction covered by other contracts". As regards contract No.1117, he held that the property in the goods supplied in pursuance of this contract passed only at the stage when the goods had become immovable and, therefore, the transaction was not exigible to sales tax. As regards contract No.3066, while noting that the tender showed that the company offered to supply, deliver and instal the articles mentioned in the tender, pointed out that item No.4 thereof containing quotations for "lighting installations" quoted some prices for accessories and held that it was "not clear from the contract whether those accessories when the installations were completed became permanent fixtures?" and, "therefore, in respect of this contract and such other contracts it is necessary that local inspection is conducted to find out which of the articles used in the execution of the contract have become immovable and which of them remained movable even after completion of the contract". He further observed that the transfer of property in goods in respect of such articles which remained movables even after completion of contract would certainly mean sale of movables and, consequently, was liable to tax under the provisions of the sales tax laws. He further observed that the transfer of property in goods in respect of such articles which remained movables even after completion of contract would certainly mean sale of movables and, consequently, was liable to tax under the provisions of the sales tax laws. As regards contract No.1225/abm/bs, after examining it, the learned Deputy Commissioner said that prices for accessories were charged and his comments in respect of the preceding contract, that is contract No.3066, should govern this contract and the like also. After discussing certain decisions including the decisions of the Supreme Court in Gannon Dunkerleys case [1958] 9 S. T. C.353 (S. C.) and in Carl Stills case [1961] 12 S. T. C.449 (S. C.), the learned Deputy Commissioner observed : from the above it is clear that in order to constitute sale of goods used in a works contract the following ingredients must be satisfied ; (a) There should be an agreement, express or implied for sale ; (b) The goods covered by the agreement and the goods in which the property must be one and the same; (c) The property in materials used should pass as a movable property and not on the theory of accretion. The learned Deputy Commissioner further observed: 32. The taxability of different types of contract can be summed up and classified as follows : (i) Contracts involving only supply of goods :-The entire supply will be sale and hence taxable under the Bihar Sales Tax Acts. (ii) Contracts involving supply of goods and execution of work :- (a) If the contract is one and indivisible and the property in goods has passed at the stage, when the goods have become immovable property, it will not be taxable under the Bihar Sales Tax Acts. (b) If the contract is divisible, that is, supply of goods precedes the execution of work and they are distinct in terms, either express or implied, the supply of materials will be sale and hence taxable under the Bihar Sales Tax Acts. (c) If, on completion of the contract, certain goods supplied still remain movables and property in these goods has passed as such, the supply of such goods will be sale and hence taxable under the Bihar Sales Tax Acts. and, thereafter, passed the following order: 33. (c) If, on completion of the contract, certain goods supplied still remain movables and property in these goods has passed as such, the supply of such goods will be sale and hence taxable under the Bihar Sales Tax Acts. and, thereafter, passed the following order: 33. The result is that the assessments are set aside and remanded to the lower court for fresh assessment after- (i) examination of all the papers and documents relating to all the 122 contracts and (ii) after ascertaining the taxability of certain articles which remain movable on transfer of property in these goods, on a local inspection, on the basis of the tests discussed above. (c) After moving the Commissioner, Commercial Taxes, Bihar, unsuccessfully, the dealer filed applications in revision before the Commercial Taxes Tribunal, which were numbered as Revision Cases Nos.171 and 172 of 1966. In those revision cases, the correctness of the order remanding the cases to the assessing officer for fresh assessment was not challenged, but the directions contained in paragraph 32 (ii) (c) of the order of remand and also the direction given in paragraph 33 (ii) were impugned as incorrect. The Tribunal disposed of both the revision cases by a common order dated 11th November, 1967. Regarding the direction given in paragraph 32 (ii) (c), the Tribunal held as follows: we are of the opinion that the aforesaid direction cannot be said to be improper or illegal as this is in conformity with the decision reported in [1958] 9 S. T. C.353 (S. C.) State of Madras V/s. Gannon Dunkerley and Co. (Madras) Ltd. But it may simply be said that the direction given in paragraph 32, Clause (ii), alone will not be the sole criterion for determination of the question whether the contract is a works contract or a contract for sale of materials as well. The intention of the parties and the course of working of the contracts have to be taken as a whole before coming to the conclusion that it is not a works contract. It went on to add : all that may be said of the order of remand passed by the learned Deputy Commissioner in para 32, Clause (h) (c), or in para 33, Clause (ii), of his judgment is that it is not self-contained. It went on to add : all that may be said of the order of remand passed by the learned Deputy Commissioner in para 32, Clause (h) (c), or in para 33, Clause (ii), of his judgment is that it is not self-contained. Apart from the investigations directed in the aforesaid paragraphs, the assessing officer has also to consider whether there was any agreement for the sale of the movables. Holding that the Deputy Commissioner has not lost sight of that principle, the Tribunal dismissed both the applications. (d) The applications for making a reference on certain questions of law to this court having been rejected by the Tribunal by its order dated 9th May, 1968, passed in Reference Cases Nos.58 and 59 of 1968, the dealer filed applications under Sec.33 (2) (b) of the Bihar Sales Tax Act, 1959, in this court which gave rise to the present tax cases and this court by two separate orders, both dated 1st July, 1969, passed in the two tax cases, directed the Tribunal to refer to this court a certain question framed by it which, as the question has been reframed, need not be set out. After the Tribunal had made a reference in accordance with the aforesaid orders and when these tax cases were being heard, the question in both the cases was, with the consent of the parties, by order dated 13th May, 1977, reframed thus: whether, in the facts and circumstances of the case, the direction of the Deputy Commissioner, confirmed in the Tribunals order to find out by local inspection if certain goods transferred in execution of the contract after its completion still remain movable property, is justified in law ? this is the question that we have to answer. 3 Before proceeding to answer the question, it is necessary first to point out that the order of the learned Deputy Commissioner, directing a local inspection to find out whether the articles remain still movables even after transfer of property in the goods, is not a direction applicable to all cases. this is the question that we have to answer. 3 Before proceeding to answer the question, it is necessary first to point out that the order of the learned Deputy Commissioner, directing a local inspection to find out whether the articles remain still movables even after transfer of property in the goods, is not a direction applicable to all cases. I have already pointed out that as regards one specimen, namely, contract No.1117, on examination of the terms of the contract itself, the learned Deputy Commissioner arrived at the finding that property in the goods supplied passed only at the stage when the goods had become immovable and, therefore, the transaction was not exigible to sales tax. Obviously, the learned Deputy Commissioner did not direct any inspection in respect of articles, goods or materials supplied in pursuance of contract No.1117 and similar contracts. He directed an enquiry in respect of contracts Nos.3066 and 1225/abm/bs and contracts similar to them on the finding that "it was not clear from the contract whether those accessories when the installations were completed, became permanent fixtures". It was not clear from the contract whether those accessories when the installations were completed, became permanent fixtures, is another mode of expressing that it was not clear from the contract whether at the time the property in those accessories passed they had become permanent fixtures or not. Regard being had to the circumstances, it must be held that the direction to hold inspection to ascertain whether the goods remain movable even after transfer of property in them, though couched in general terms in paragraph 33 of the order of the learned Deputy Commissioner, was a direction confined to cases where on execution of the terms of the contract it was not clear whether these goods remained movable even after transfer of property in these goods. I should also emphasise that while affirming this direction for local inspection in cases indicated by the Deputy Commissioner, the Tribunal rightly directed the assessing officer not to tax the goods merely because they remain movable even after completion of the contract, but also to consider whether there was any agreement for the sale of the movables. 4. I should also emphasise that while affirming this direction for local inspection in cases indicated by the Deputy Commissioner, the Tribunal rightly directed the assessing officer not to tax the goods merely because they remain movable even after completion of the contract, but also to consider whether there was any agreement for the sale of the movables. 4. It is argued by Sri K. D. Chatterjee, the learned Advocate for the dealer, that the question should be answered in the negative as, in the facts and circumstances of the case, the direction of the Deputy Commissioner which had been maintained by the Tribunal, to find out whether certain goods supplied in execution of the contract still remain movable property even after its completion, was illegal. It is pointed out that the question for determination in this case whether in respect of the transaction aforesaid sales tax is exigible, can be determined only on the terms of the contract and it is urged that ascertainment of the fact whether or not the goods supplied in execution of the contract even after its completion or execution remained movable property or not is of no relevance in ascertaining the terms of the contract. The Supreme Court, speaking through Shah, J. , in Arun Electrics V/s. Commissioner of Sales Tax [1966] 17 S. T. C.576 at 580 (S. C.), laid down : the question whether in respect of a transaction sales tax is exigible may be determined only on the terms of the contract. In order to determine exigibility of the transaction to sales tax, to consider matters irrelevant to the ascertainment of the terms of the contract would be clearly illegal. If ascertainment of the fact whether the goods supplied under the contract remain movable "even on transfer of property in those goods after completion of contract" is irrelevant for ascertaining the terms of the contract, the question referred must be answered in the negative. If, however, it has some bearing, howsoever slight, in determination of the terms of the contract, the question must be answered in the affirmative. 5. I am unable to hold that the fact whether or not the goods supplied continue to be movables even on transfer of property in those goods is entirely irrelevant to the determination of the terms of the contract in the facts and circumstances of the case. 5. I am unable to hold that the fact whether or not the goods supplied continue to be movables even on transfer of property in those goods is entirely irrelevant to the determination of the terms of the contract in the facts and circumstances of the case. The transaction would be exigible to sales tax only if it was either in essence and substance a contract for sale of goods and not a works contract, or if the transaction was a composite contract containing two distinct and separate agreements, one for sale of goods for monetary consideration and the other for remuneration for service and work done, in which case it will be open to the authorities to impose sales tax on that part of it which is a contract for sale of goods. In State of Madras V/s. Gannon Dunkerley and Co. [1958] 9 S. T. C.353 at 386 (S. C.), which is a leading decision on the subject of works contract, to use the words of Shah, J. , as he then was, in the case of John Mowlem and Co. [1967] 19 S. T. C.59 at 61-62 (S. C.), it was pointed out that "in a works contract, the agreement between the parties is that the contractor should construct the works according to the specifications contained in the agreement, and in consideration therefor receive payment as provided therein, and in such an agreement there is neither a contract to sell the materials used in the construction, nor does property pass therein as movables" (Emphasis supplied ). In that case, the theory that under the contract there was a sale of goods or that the contract contained any agreement for the sale of goods, Venkatarama Aiyar, J. , who spoke for the Supreme Court, said "must fail on both the grounds that there is no agreement to sell materials as such, and that property in them does not pass as movables" : State of Madras V/s. Gannon Dunkerley and Co. [madras) Ltd. [1958] 9 S. T. C.353 at 386 (S. C. ). [madras) Ltd. [1958] 9 S. T. C.353 at 386 (S. C. ). In State of Rajasthan V/s. Man Industrial Corporation Limited [1969] 24 S. T. C.349 at 355 (S. C.), the Supreme Court dealing with the test for determining whether a transaction amounted to a sale or merely to a works contract, observed as follows: the test in each case is whether the object of the party sought to be taxed is that the chattel as chattel passes to the other party and the services rendered in connection with the installation are under a separate contract or are incidental to the execution of the contract of sale. And this test was quoted with approval by the Supreme Court in a later decision in Vanguard Rolling Shutters and Steel Works V/s. Commissioner of Sales Tax, U. P. [1977] 39 S. T. C.372 at 375 (S. C. ). In that case, while laying down certain prima facie tests for determining whether the transaction was a works contract or primarily a contract for sale of materials, Fazal Ali, J. , speaking for the Supreme Court, observed: so also where certain materials are not merely supplied but fixed to an immovable property so as to become a permanent fixture and an accretion to the said property, the contract prima facie would be a works contract. Therefore, the question whether property in the goods supplied passed as movables or not is an important criterion for determining whether the transaction is a works contract or a contract of sale of goods. Property in the goods is certainly transferred after the completion of the work and the execution of the contract and if, at that stage, the goods supplied are movables, it must be held that the property in the goods passed as movables. In the face of these decisions, it is idle to contend that the fact whether the goods supplied continued to be movables even after the execution of the contract, is irrelevant for determination of the question whether the transaction was a contract for sale of goods or a contract for service and work. 6. In the face of these decisions, it is idle to contend that the fact whether the goods supplied continued to be movables even after the execution of the contract, is irrelevant for determination of the question whether the transaction was a contract for sale of goods or a contract for service and work. 6. Sri Chatterjee, the learned Advocate appearing for the dealer, drew our attention to the decision of the Supreme Court in Carl Stills case [1961] 12 S. T. C.449 (S. C.), for the proposition that even when the property in the goods passed as movables, the contract for supply of those goods may still be a works contract and not a composite works contract and a contract for sale of goods. That would only show that the fact that the property in the goods passed as movables is not decisive ; it does not show that the said fact is irrelevant. Sri Chatterjee also referred to the decision of this court reported in Commissioner of Commercial Taxes V/s. Indian Cable Co. Ltd. [1971] 27 S. T. C.487. But that case does not support the contention that the question whether the goods continued to be movables after the execution of the contract is immaterial to the determination of the question whether the transaction is a works contract pure and simple or is also a contract for sale of goods. 7. It is true that the question whether title in the goods passed as movables has to be determined, in a case where the contract has been reduced to writing, on the basis of the terms of the contract itself, but it cannot be gainsaid that, where the terms of the contract are ambiguous and the ambiguity is a latent ambiguity, recourse can be had to the surrounding circumstances to interpret and ascertain the terms of the contract. 8. For the aforesaid reasons, I would answer the question in the affirma-tive and against the dealer in both the cases. Hearing fee Rs.200.