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2013 (11) TMI 771 - MADHYA PRADESH HIGH COURTValue of dyes and chemicals - Work contract - Held that:- tax liability is drawn in the ambit of definition of sales in clause (i) and (ii) of S.2(t) of M.P. Vanijyik Kar Adhiniyam, 1994 and, therefore, material used and transferred in the same form or otherwise, it is deemed sales and is liable to tax under the provisions of Act that those materials like fuel, water, labour, which are consumed but not transferred to the contractee are not deemed sales whereas material which are transferred in the same form or in other form are deemed sale, according to the case of Gannon Dunkerley (1992 (11) TMI 254 - SUPREME COURT OF INDIA) - The High Court of Madhya Pradesh has rightly held that goods used in process of sizing of yarn is transferred to the contractee and is liable to tax. Consequently we find that no error or fault could be found in the impugned order passed by Divisional Deputy Commissioner in revision petition and we hold that according to 46th amendment of Constitution of India as already held above, the State Governments are empowered to the levy tax on the goods transferred otherwise than in pursuance of contract i.e., in execution of work contract and hence undoubtedly the State is entitled to levy tax on the value of material involved in the execution of job work/work contract - Decided against assessee.
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