STATE OF GUJARAT vs M/S. KAILASH ENGINEERING CO.

The Supreme Court held that the contract between the respondent company and the Western Railway was a works contract under Section 27 of the Bombay Sales-tax Act, 1953, as the ownership of the coach bodies vested in the Railway upon completion and did not pass to the respondent. The Court found that the respondent acted as an agent for the Railway in procuring materials, and thus, no sales-tax was applicable to the transaction. The High Court's ruling was upheld, confirming that the transaction did not involve a sale.