HINDUSTAN AERONAUTICS LTD. vs THE STATE OF ORISSA

The Supreme Court held that the transaction between Hindustan Aeronautics Ltd. (H.A.L.) and the Government of India was a contract for work and labour, not a sale, thus exempting it from central sales tax under the Central Sales Tax Act, 1956. The Court established that the distinction between a contract for sale and a contract for work depends on the main object of the parties involved, emphasizing that in a contract for work, the performer does not hold property in the produced item. The appeal was allowed, overturning the lower courts' decisions that had classified the transaction as a sale.