Report No. 61

Position in Some other Countries

1A.12. In Australia.-

The position in Australia in this respect may be contrasted. In a new South Wales case,1 the Supreme Court of New South Wales held, that the agreement between the parties was one to do certain work and to supply certain materials, and not an agreement for the sale or delivery of the goods.2

In 1932, the Legislature3 intervened, and enacted, in the statute of 1930, a new provision, section 3(4), in the following terms4:-

1. Sydney Hydraulic and Central Engineering Co. v. Blackwood & Son, 8 NSWSR 10.

2. Irving's Commonwealth Sales Tax Law and Practice, (1950), p. 77.

3. See State of Madras v. Gannon Dunkerley & Co., AIR 1958 SC 560 (570).

4. Section 3(4), Commonwealth Sales Tax Act (Australia).

"For the purpose of this Act, a person shall be deemed to have sold goods, if, in the performance of any contract (not being a contract for the sale of goods) under which he has received, or is entitled to receive, valuable consideration, he supplies goods the property in which (whether as goods or in some other form), passes, under the terms of the contract, to some other person."

After this, the question arose in later case whether1 a contractor who fabricated piles and used them in constructing a bridge was liable to pay sales tax on the value of the piles. The majority of the court held that though there was, in fact, no sale of the piles, in law there was one, by reason of section 3(4) of the Act.

1. M.R. Hornibrook (Pvt.) Ltd. v. Federal Commissioner of Taxation, (1939) 62 CLR 272 (281).