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PETITIONER: RAM SINGH & SONS ENG. WORKS

       Vs.

RESPONDENT: COMMISSIONER OF SALES TAX, U.P.

DATE OF JUDGMENT07/12/1978

BENCH: BHAGWATI, P.N. BENCH: BHAGWATI, P.N. PATHAK, R.S.

CITATION:  1979 AIR  545            1979 SCR  (2) 621  1979 SCC  (1) 487  CITATOR INFO :  F          1984 SC 774  (25)

ACT:      Contract of  sale and  contract for  work  and  labour, distinction and  test of-Whether  a contract for fabrication and erection  of 3-motion  electrical  overhead  (travelling cranes) is  a contract  of sale  or contract  for  work  and labour.

HEADNOTE:      The appellant  assessee was a partnership firm carrying on business  inter  alia  of  manufacture  and  erection  of cranes. During  the assessment  year 1965-66,  the  assessee entered into  two contracts  for supply  and erection  of 3- motion electrical  overhead travelling  cranes. The assessee carried out both the contracts and fabricated and erected 3- motion electrical  overhead travelling  cranes according  to the  contract   specifications.  A  question  arose  in  the assessment of  the assessee  to sales tax for the assessment year 1965-66  whether the  amount of Rs. 1,34,500/- received by the  assessee under  the  contract  with  M/s.  Kamlapati Motilal  Sugar  Mills  and  the  amount  of  Rs.  2,38,000/- received under the contract with M/s. Upper Doab Sugar Mills Ltd., formed  part of  the turnover  of the assessee and was liable to  sales tax.  The Sales  Tax Officer  took the view that the  contracts were  essentially contracts  of sale  of ready made  cranes and  the erection  of the  cranes at  the factory site  was merely  incidental to  the sales  and  the amounts of  Rs. 1,34,500/- and Rs. 2,38,000/- received under the contracts  were, therefore taxable. This view was upheld by the Assistant Commissioner in appeal, but in revision the Additional Judge  (Revisions) held  that  each  of  the  two contracts was  a works  contract not  involving any  sale of goods and  hence the amounts were not exigible to sales tax. On a  reference to  the High  Court at  the instance  of the Commissioner of Sales Tax, the High Court took the view that each of  the  two  contracts  was  for  supply  of  3-motion electrical overhead travelling cranes as a complete unit and "the predominant  object was  supply of  crane  as  complete unit"  and  "the  bestowing  of  labour  and  skill  in  the execution of  the contract" appeared to have been incidental to the  supply of the machine." The High Court observed that

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in its  view parties  "intended the  property to pass in the subject matter  of the contract, namely, the completed crane as movable property" and concluded that it was a contract of sale of  goods and  not a  contract for work and labour. The High Court  accordingly answered both the questions referred to it against the assessee and in favour of the Revenue.      Allowing the appeal by special leave the Court, ^      HELD: 1.  The  primary  test  to  find  out  whether  a contract is  a contract  of sale  or a contract for work and labour is  whether the  contract is one whose main object is transfer of property in a chattel as a chattel to the buyer, though some  work may  be required  to  be  done  under  the contract as  ancillary or  incidental to  the sale  or it is carrying out  of work  by bestowal of labour and service and materials are  used in  execution of  such work. The Court’s have evolved some subsidiary tests to resolve the difficulty arising in the application of this primary test as there are a large number of cases which are on the 622 border line  and fall within what may be called "grey area". One  such   test  formulated   by  the   Supreme  Court   in Commissioner of  Sales Tax,  Madhya  Pradesh  v.  Purshottam Premji, 26 STC 38 is:      "The primary  difference between a contract for work or service and  a contract  for sale  of goods  is that  in the former there  is in  the person performing work or rendering service  no   property  in   the   thing   produced   as   a whole.......In the  case of  a contract  for sale, the thing produced as  a whole  has individual  existence as  the sole property of  the party  who produced it (at some time before delivery, and  the property  therein passes  only under  the contract relating  thereto to  the other  party for  price." [628 C-G]      Commissioner of  Sales Tax,  M.P. v. Purshottam Premji, 26 STC  38; State of Rajasthan v. Man Industrial Corporation 24 STC  349; Sentinel Rolling Shutters & Engineering Co. (P) Ltd. v. Commissioner of Sales Tax, Maharashtra, [1979] 1 SCR 644; applied.      2. Each  of  the  two  contracts  for  fabrication  and erection of  a 3-motion electrical overhead travelling crane is not  a contract  for sale  but a  contract for  work  and labour, (a)  It is essentially a transaction for fabricating component parts  and putting them together and erecting them at the  site so  as  to  constitute  a  3-motion  electrical overhead travelling  crane. The  transaction is no different than one  for fabrication  and erection of an open godown or shed with asbestos or tin sheets fixed on columns, (b) It is not as if a 3-motion electrical overhead travelling crane is fabricated by  the manufacturer  and then sold and delivered to the  customer as  a  chattel,  (c)  The  fabrication  and erection of  a 3-motion electrical overhead travelling crane is a  highly skilled  and specialised  job and the component parts have  to be  taken to  the site and they are assembled and erected  there and  it is  only  when  this  process  is complete, then  a 3-motion  electrical  overhead  travelling crane comes  into  being.  The  process  of  assembling  and erection requires  a high  degree of  skill and  it  is  not possible to  say that  the erection of a 3-motion electrical overhead travelling  crane at  the site is merely incidental to its  manufacture and supply. The fabrication and erection is one  single indivisible process and a 3-motion electrical overhead travelling crane comes into existence only when the erection is complete. The erection is thus a fundamental and integral part  of the  contract, because  without it  the 3-

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motion electrical  overhead travelling  crane does  not come into being.  The manufacturer would undoubtedly be the owner of the  component parts  when he  fabricated them  but at no stage does  he become  the  owner  of  3-motion,  electrical overhead travelling  crane as  a unit  so as to transfer the property in  it to  the customer.  The  3-motion  electrical overhead travelling crane comes into existence only when the component parts  are fixed  in position  and erected  at the site, but  at that  stage it  becomes the  property  of  the customer because  it is  permanently embedded  in  the  land belonging to  the customer. The result is that as soon as 3- motion  electrical  overhead  travelling  crane  comes  into being, it  is the  property of  the customer  and there  is, therefore, no transfer of property in it by the manufacturer to the customer as a chattel. [630C-D, 631E-H-632 A]      Sentinel Rolling Shutters & Engineering Co. (P) Ltd. v. Commissioner of  Sales Tax,  Maharashtra, [1979]  1 SCR page 644: followed.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 1314 of 1975.      Appeal by  Special Leave  from the  Judgment and  Order dated 29-1-1975  of the  Allahabad High  Court in S.T.R. No. 771 of 1972. 623      S.C. Manchanda,  Mrs. Urmila  Kapoor and  Miss  Kamlesh Bansal for the Appellant.      G.N. Dikshit and O.P. Rana for the Respondent.      The Judgment of the Court was delivered by      BHAGWATI,  J.   The  short  question  that  arises  for determination in  this appeal  by special leave is whether a contract  for   fabrication  and   erection  of  a  3-motion electrical overhead  travelling crane  is a contract of sale or  a   contract  for  work  and  labour.  The  question  is fortunately not  beset with much difficulty since there is a recent decision of this Court in Sentinel Rolling Shutters & Engineering Co.  (P) Ltd.  v.  Commissioner  of  Sales  Tax, Maharashtra which  affords considerable  guidance and almost concludes the determination of the question in favour of the assessee.      The assessee,  who is  the appellant  before us,  is  a partnership firm  carrying on  the business  inter  alia  of manufacturing and  erection of cranes. During the assessment year 1965-66,  the assessee  entered into  two contracts for supply  and   erection  of   3-motion  electrical   overhead travelling cranes,  one with  M/s Kamlapat  Moti  Lal  Sugar Mills and the other with M/s Upper Doab Sugar Mills Ltd. The contract with M/s Kamlapat Moti Lal Sugar Mills provided for supply and  erection of  one  3-motion  electrical  overhead travelling crane  at the  price of Rs. 1,34,500/- and on the terms and  conditions set  out in  a letter addressed by M/s Kamlapat Moti Lal Sugar Mills to be assessee:           "We confirm  all the  specifications given in your      above referred quotation with the following changes:           1.   Structural  capacity  will  be  suitable  for                safeload of  two  unloading  crabs,  i.e.  10                tons.           2.   Span of  the long  gantry which  is given 50’                will be confirmed shortly.           3.   Your supply will also include gantry of 35’ x                50’ to make the crane three-motions.           4.   We shall not be required to give any material

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              except electric line up to the crane.           5.   You will  be  supplying  crane-drivers  cabin                with automatic  control panel  free  provided                its trial is successful. 624           6.   The minimum  number of  operations will be 30                per hour approx.           7.   You  will   give  us  working  trial  of  the                equipment at least by 30th September, 1965.           8.   The price  of the  above  equipment  will  be                Rs.1,34,500/-f.o.r.  Khatauli,   sales   tax,                excise duty  will be  extra, if payable. This                price includes erection charges.           9.   Terms of payment           40% advance with the order           10% after one month from the date of the order           25% after the erection of bridge and columns           15% after trial.           10% after one month’s satisfactory performance.           A penalty  of 1/2% will be payable per week by you      in case  of delay  per week after 30th September, 1965,      and to  a maximum  of 5%  of the  total value. You will      send your  staff for erecting the unloader and we shall      be  providing  you  necessary  tools  and  tackles  and      welding set when required. Available accommodation will      also be provided." The contract  between Upper  Doab Sugar  Mills Ltd.  was for supply and  erection of  two  3-motion  electrical  overhead travelling cranes  with two  crabs each  at the price of Rs. 1,19,000/- for  each crane and it was on the following terms and conditions:           "That the  contractor will  supply the company two      cranes with two crabs each as under:-           (i)  Crane bridge:  The structural  design of  the                crane bridge  will be  in accordance with the                structural specifications  of B.S.S.  466 for                electric  overhead   travelling  crane.   The                structural parts will be fabricated from good                quality  Tata   tested  steel  sections.  The                girders  for  the  main  bridge  will  be  of                lattice construction type heavy duty.           (ii) Drivers cabin:  The driver’s cabin will be of                weather proof  outdoor construction.  It will                be with  material  in  a  position  that  the                operator’s view is not obstructed 625                during the  load  handling  and  will  travel                along with the crane crab.           (iii)Electrical equipment  for driver’s cabin: The                driver’s cabin  will  be  provided  with  the                following  electrical   equipment  and  other                necessary fittings:-      1.   One protective paner for electrical equipment.      2.   Drum controllers for all the motors.      3.   Plug and sockets for hand lamp.      4.   One electric light point.      5.   One alarm bell and all other necessary fittings.      Steps ladders  will be  provided from  the crane bridge for easy access to the cabins.           (iv) Wiring:  Wiring   with  V.I.R.   Wrain  steel                conduit  pipes   will  be   provided  between                individual motors  and  controllers,  current                collectors and  resistances in the cabin. For                connection of  current to  the trolley, a set                of  bars   copper  conductors  complete  with

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              insulators  and   strainers  mounted  on  the                bridge will  be provided.  A set  of  current                collectors will  be mounted  on the  trolley,                containing   renewable    graphitic    carbon                collectors.      PRICE: That  for  two  complete  cranes  of  the  above mentioned  specifications  with  two  crabs  each  including erection, the company will pay to the contractor at the rate of Rs.1,19,000/-  per crane  with two  crabs each  including erection complete in all respects with necessary equipment. Mode of Payment:      1.   30% with the order      2.   20% after two months of the actual commencement of           work      3.   25% after  the completion  of erection  of columns           and bridge.      4.   15%  after   completion  and  giving  satisfactory           trials.      5.   10% after one month’s satisfactory work.      That the  contractor will  execute the entire work i.e. fabrication, erection and construction latest by 30th day of September, 1964  so that  the trials  can begin  on the  1st October, 1964. The defects will be 626 rectified by  the 10th  October, 1964.  If the  work is  not completed by  the 30th  September, 1964,  a penalty  of  Rs. 400/- per day from the 1st October, 1964 will be paid by the contractor to  the company  till the  date of completion and satisfactory operation of the cranes.      That all  such items  which are considered defective by the company will be replaced at the contractor’s cost within the  above   specified  date   to   the   company’s   entire satisfaction so  that  regular  working  of  the  cranes  is ensured.      That all  materials will  be provided by the contractor and electricity  will be  charged at cost if consumed by the contractor. Only  such tools  which  are  available  in  the stores of  the Co.,  will be given to the contractor on loan on returnable  basis and  the contractor  will  pay  to  the company the  cost of such material which are not returned to the  company.   The  final  payment  of  the  bills  of  the contractor will be made on his getting NOTHING DUE clearance certificate from the Stores Department of the Company.      That there  will be  no liability and responsibility of the company  whatsoever besides  payment  of  price  of  the cranes.      That sales  tax or  excise duty  and  other  government duty, if  any, will be extra. Packing and forwarding charges will also be extra."      The assessee  carried  out  both  these  contracts  and fabricated and  erected  one  3-motion  electrical  overhead travelling crane  at the  factory of  M/s Kamlapati Moti Lal Sugar Mills  and two 3-motion electrical overhead travelling cranes at  the factory  of M/s  Upper Doab  Sugar Mills Ltd. according to the contracts specifications.      The question arose in the assessment of the assessee to sales tax for the assessment year 1965-66 whether the amount of Rs. 1,34,500/-received by the assessee under the contract with M/s  Kamlapati Moti  Lal Sugar  Mills and the amount of Rs. 2,38,000/-  received under  the contract  with M/s Upper Doab Sugar  Mills Ltd.  formed part  of the  turnover of the assessee and  liable  to  sales  tax.  The  answer  to  this question  depended  upon  whether  the  contracts  with  M/s Kamlapati Moti  Lal Sugar  Mills and  M/s Upper  Doab  Sugar Mills Ltd.  were contracts of sale or contracts for work and

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labour. If  they were   contracts  of sale,  the amounts  of Rs.1,34,500/- and  Rs. 2,38,000/-would  be taxable  as  sale price forming part of the turnover, but not so, if they were contracts for work and labour. The Sales Tax Officer 627 took the  view that the contracts were essentially contracts of sale  of ready made cranes and the erection of the cranes at the  factory site  was merely  incidental to the sale and the amounts  of  Rs.1,34,500/-and  Rs.  2,38,000/-  received under the  contracts were, therefore, taxable. This view was upheld by  the Assistant  Commissioner in  appeal, but on an application for  revision being  filed by  the assessee, the Additional Judge  (Revisions) held  that  each  of  the  two contracts was  a works  contract not  involving any  sale of goods and  hence the  amounts  of  Rs.  1,34,500/-  and  Rs. 2,38,000/- were  not exigible to sales tax. The Commissioner of Sales  Tax thereupon  applied for  a reference and on his application,  the   following  two  questions  of  law  were referred for the opinion of the High Court:      1.   Whether in the facts and circumstances of the case           the  turnover   of  Rs.  1,34,500/-  made  by  the           assessee in  respect of  Kamlapati  Motilal  Sugar           Mills amounts  to a  works  contract  or  sale  of           goods? If so, to what extent?      2.   Whether in the facts and circumstances of the case           the turnover  of Rs. 2,38,000 made by the assessee           in respect of the Upper Doab Sugar Mills amount to           a works  contract or sale of goods? If so, to what           extent?      The High  Court took  the view  that each  of  the  two contracts was  for supply  of 3-motion  electrical  overhead travelling crane  as a  complete unit  and "the  predominent object was  supply of  crane as  a complete  unit" and  "the bestowing of  labour and  skill  in  the  execution  of  the contract" appeared "to have been incidental to the supply of the machine".  The High  Court observed that in its view the parties "intended the property to pass in the subject matter of the  contract,namely,  the  completed  crane  as  movable property" and  concluded that  it was  a contract of sale of goods and not a contract for work and labour. The High Court accordingly answered  both the  questions referred  to it in favour of the Revenue and against the assessee. The assessee thereupon brought  the present  appeal  with  special  leave obtained from this Court.      Now, the  distinction between  a contract of sale and a contract for  work  and  labour  has  been  pointed  out  in Halsbury’s Laws of England, 3 ed., volume 34, para 3 at page 6 in the following words:           "A contract  of sale  is  a  contract  whose  main      object is  the transfer  of the  property in,  and  the      delivery of  the possession  of, a chattel as a chattel      to the buyer. Where the main 628      object of  work undertaken by the payee of the price is      not the transfer of a chattel qua chattel, the contract      is one  for work and labour. The test is whether or not      the work  and labour  bestowed and in anything that can      properly  become  the  subject  of  sale;  neither  the      ownership of  the materials, nor the value of the skill      and labour as compared with the value of the materials,      is conclusive,  although such matters may be taken into      consideration in determinating, in the circumstances of      a particular case, whether the contract is in substance      one for  work and  labour or  one for  the  sale  of  a      chattel."

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    The primary  test is  whether the contract is one whose main object  is transfer  of property  in  a  chattel  as  a chattel to the buyer, though some work may be required to be done under  the contract  as ancillary  or incidental to the sale or it is carrying out of work by bestowal of labour and service and  materials are  used in  execution of such work. This test  has been  recognised and  approved in a number of decisions of this Court and it may now be regarded as beyond controversy,  but   the  real   difficulty  arises   in  its application as  there are  a large number of cases which are on the  border line  and fall within what may be called grey area. To  resolve this  difficulty, the  courts have evolved some  subsidiary  tests  and  one  of  such  tests  is  that formulated by  this Court  in  Commissioner  of  Sales  Tax, Madhya Pradesh v. Purshottam Premji where it has been said:           The primary difference between a contract for work      or service  and a contract for sale of goods is that in      the former  there is  in the  person performing work or      rendering service  no property in the thing produced as      a whole.  . .  In the  case of a contract for sale, the      thing produced  as a  whole has individual existence as      the sole property of the party who produced it, at some      time before  delivery, and  the property therein passes      only under  the contract  relating thereto to the other      party for price."      This was the test applied by this Court in the State of Rajasthan v.  Man Industrial  Corporation for holding that a contract for  providing and  fixing four  different types of windows  of  certain  sizes  according  to  "specifications, designs, drawings  and instructions" set out in the contract was a  contract for  work and  labour and not a contract for sale Shah, J., speaking on behalf of the Court, analysed the nature 629 of the  contract and pointed out that "The window-leaves did not pass  to the  Union of  India under  the  terms  of  the contract as window-leaves. Only on the fixing of the windows as stipulated,  the contract could be fully executed and the property in the windows passed on the completion of the work and not  before". The  contract  was  not  for  transfer  of property in  the window  leaves as  window leaves.  It was a contract for  providing and fixing windows and windows could come into  existence only  when the window-leaves were fixed to the building by bestowing labour and skill and it was for this reason that it was held to be a works contract.      The same  test reasoning  was applied  by this Court in Sentinel Rolling  Shutters &  Engineering Co.  (P)  Ltd.  v. Commissioner of  Sales Tax,  Maharashtra (supra).  There the question was  whether a contract for fabrication, supply and erection of certain types of rolling shutters was a contract of sale  or a  contract for  work  and  labour.  This  Court analysed the  nature of  the contract  and pointed  out that "not only  are  the  Rolling  Shutters  to  be  manufactured according  to  the  specifications,  designs,  drawings  and instructions provided  in the contract, but they are also to be erected and installed at the premises of the company. The price stipulated  in the  contract is  inclusive of erection and installation charges and the contract does not recognise any dichotomy  between fabrication and supply of the Rolling Shutters and  their erection  and installation so far as the price is  concerned. The  erection and  installation of  the Rolling Shutters  is  as  much  an  essential  part  of  the contract as the fabrication and supply and it is only on the erection and  installation of  the Rolling Shutters that the contract would be fully executed." This Court then proceeded

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to examine  what is  a rolling shutter and how it is erected and installed  in the  premises and  observed that a rolling shutter  consists   of  several  component  parts  and  ’the component parts  do not  constitute a  rolling shutter until they are  fixed and erected on the premises. It is only when the component  parts are  fixed on  the premises  and fitted into one another that they constitute a rolling shutter as a commercial article  and till  then they are merely component parts and cannot be said to consitute a rolling shutter. The erection and  installation of  the rolling  shutter  cannot, therefore, be  said to  be incidental to its manufacture and supply. It  is  a  fundamental  and  integral  part  of  the contract, because  without it  the rolling  shutter does not come into  being. The  manufacturer would undoubtedly be the owner of the component parts when he fabricates them, but at no stage  does he become the owner of the rolling shutter as a unit so as to transfer the property in it to the customer. The rolling  shutter comes into existence as a unit when the components 630 parts  are  fixed  in  position  on  the  premises  and  it, therefore, becomes  the property  of the customer as soon as it comes into being. There is no transfer of property in the rolling shutter  by the  manufacturer to  the customer  as a chattel. It  is essentially  a transaction  for  fabricating component parts  and fixing  them on  the premises  so as to constitute a rolling shutter." The contract for fabrication, supply and  erection of  the rolling  shutters was,  on this reasoning, held  by the  Court to be a contract for work and labour and not a contract for sale.      If we  consider what  is a 3-motion electrical overhead travelling crane  and how  it  is  fabricated,  erected  and installed, it will become immediately clear that the analogy of the  decision in  Sentinel Rolling Shutters & Engineering Co. (P)  Ltd.’s case (supra) to the present case is striking and it  must lead  us to the conclusion that each of the two contracts with which we are concerned here is not a contract for sale but a contract for work and labour. The publication of the Indian Standards Institution which lays down the Code of Practice  for Design  of Overhead  Travelling Cranes  and Gantry Cranes  clearly  shows  that  a  3-motion  electrical overhead travelling  crane consists  of  44  main  component parts and  it  is  only  when  they  are  put  together  and assembled at the site that they assume the shape of a crane. It is  not as  if a  3-motion electrical overhead travelling crane is  fabricated by  the manufacturer  and then sold and delivered to  the customer as a chattel. One single 3-motion electrical overhead  travelling  crane  covers  an  area  of 10,549  Square   Feat  at   the  site.  When  an  order  for fabrication and  erection  of  3-month  electrical  overhead travelling crane  is received  by the  manufacturer from the customer alongwith  the specifications  of the  size and the materials, the  manufacturer designis  the machine according to the  specifications and  prepares the  necessary drawings for its  fabrication and  manufacture and  two copies of the drawings  are   sent  to  the  customer  for  preparing  the foundation at the site for erection of the columns which are ten in  number along  with  four  supporting  columns.  Each column has  to be  placed on a grouted foundation which is 7 feet deep and is securely bolted with foundation bolts, 5 on each side. which are grouted so as to be able to support the weight of  the columns.  The columns  thus become  permanent fixtures on  the land  of the customer and they constitute a permanent foundation  for the  3-motion electrical  overhead travelling  crane.   The  detailed   specifications  of  the

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foundation  bolts   and  the   columns  are   given  in  the publication of  the Indian  Standards Institution. It may be noted that  even so  far as  the columns are concerned, they are not  fabricatetd by  the manufacturer in his factory and then taken to the site. Each column has a height of about 40 feet and it is made in three or four pieces and these pieces 631 are joined  together with  bolts and  welded at  the time of erection at  the  site. Thereafter a 120 feet long gantry is assembled by the manufacturer in eight pieces and each piece is placed  on two  columns and the erection of the gantry on both sides  is completed  after  bolting  and  svelaing  the gantry with  the columns.  Then about 60 pieces are fixed on to the gantry on both sides to form a platform to facilitate the operation and maintenance of the crane and the component parts of  the railings  are assembled at the site with bolts and welded  to the gantry. Two distance pieces assembled out of diverse  component parts are then fixed between both ends of the  gantry to  ensure stability. The manufacturer has to examine and ensure the levelling and alignment of the gantry and then  the component parts of the rails are assembled and fixed on  both sides  of the  gantry by means of M.S. cleats and bolts.  The bridge  which is  fabricated out of numerous component parts  at the  site, is  then put  on the rails so that it can run on the gantry and travel about 180 feet from one end  Or the  gantry to  another. Then rails are fixed on the bridge  and the trolley is put on the rails. The trolley consists of  several component  parts which  are brought and assembled at  the site.  There is also a platform erected on the bridge  for maintenance  of the  bridge and  trolley and lastly, there  is a  lifting grab which is made of 36 pieces assembled at  the site  and this  grab is   fitted on to the trolley. It  would thus  be seen  that the  fabrication  and erection of  a 3-motion electrical overhead travelling crane is a  highly skilled  and specialised  job and the component parts have  to be  taken to  the site and they are assembled and erected  there and  it is  only  when  this  process  is complete then  a  3-motion  electrical  overhead  travelling crane comes  into  being.  The  process  of  assembling  and erection, requires  a high  degree of  skill and  it is  not possible to  say that  the erection of a 3-motion electrical overhead travelling  crane at  the site is merely incidental to its  manufacture and supply. The fabrication and erection is one  single indivisible process and a 3-motion electrical overhead travelling crane comes into existence only when the erection is complete. The erection is thus a fundamental and integral part   of  the contract,  because without it the 3- motion electrical  overhead travelling  crane does  not come into being.  The manufacturer would undoubtedly be the owner of the  components parts  when he  fabricated them but at no stage does  he become  the owner  of the 3-motion electrical overhead travelling  crane as  a unit  so as to transfer the property in  it to  the customer.  The  3-motion  electrical overhead travelling  crane comes  into existence  as a  unit only when  the component  parts are  fixed in  position  and erected at  the site,  but at  that  stage  it  becomes  the property of  the customer because it is permanently embedded in the land belonging to the customer. The result is that as 632 soon as  3-motion electrical overhead travelling crane comes into being  it is the property of the customer and there is, therefore, no transfer of property in it by the manufacturer to  the   customer  as   a  chattel.  It  is  essentially  a transaction for fabricating component parts and putting them together and erecting them at the site so as to constitute a

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3  motion   electrical  overhead   travelling   crane.   The transaction is  no different  than one  for fabrication  and erection of  an open  godown or  shed with  asbestos or  tin sheets fixed  on columns.  There can, therefore, be no doubt that the  contract in  the present  case was  a contract for work and labour and not a contract for sale. This view which we are  taking is  completely supported  by the  decision of this Court  in the  Sentinel Rolling  Shutters & Engineering Co. (P)  Ltd. v.  Commissioner  of  Sales  Tax,  Maharashtra (supra).      We accordingly allow the appeal, set aside the judgment of the  High Court and hold that the contract in the present case was  a con tract for work and labour and not a contract for sale  and comformably  with  this  view  we  answer  the question referred by the Sales Tax Tribunal in favour of the assessee and  against the  Revenue. The  State will  pay the costs of the assessee throughout. V.D.K.                                       Appeal allowed. 633