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2015 (1) TMI 452 - BOMBAY HIGH COURTWorks Contract - Transfer of property in ink and lacquer in the transaction effected in post-46th Amendment era or not – Whether the Transfer of Property in Goods involved in the Execution of Works Contracts (Re-enacted) Act, 1989, read with the 46th Amendment of the Constitution of India - Held that:- Following the decision in Commissioner of Sales Tax Versus Matushree Textile Limited [2003 (8) TMI 478 - BOMBAY HIGH COURT] wherein it has been held that there is a transfer of property in goods, i.e., materials used for dying and bleaching under the Works Contracts Act - the colored shade is passed to the fabrics due to the chemical reaction of the materials used in the process of dyeing - Coloured shade may be due to the chemical reaction of one or more materials - The coloured shade represents the inherent chemical property of the materials used - once there is passing of the chemical property of the materials used in the execution of works contract, then under the Works Contracts Act, there is a deemed sale of the materials used in the execution of the works contract - in the process of dyeing, the coloured shade passed on to the fabrics constitutes sale of the materials used in dyeing, under the Works Contracts Act. To constitute sale, either under the Sale of Goods Act, or under the BST Act, the intention of the parties to transfer the goods by an agreement, determination of price of the goods to be transferred and the actual transfer of goods as per the agreement is necessary - However, under the Works Contracts Act, the concept of deemed sale has been introduced, as a result, irrespective of the criteria laid down under the Sale of Goods Act or the BST Act, if, in the execution of a works contract, the property of the materials used in the execution of that contract passes either in its original form or in some other form, then, there is deemed sale of those materials under the Works Contracts Act - The definition of 'sale' under the Sale of Goods Act and under the BST Act is materially different from the definition given under the Works Contracts Act - to constitute sale under the Works Contracts Act, the only criteria required to be fulfilled is the transfer of property in goods used in the execution of works contract either in its original form or in some other form and not the criteria laid down under the Sale of Goods Act or under the BST Act – lacquer and ink are the materials used in plate making and the property in the same is passed on in the execution of the contract of plate making under the Works Contracts Act – thus, there was a transfer of property in ink and lacquer – Decided in favour of appellant revenue.
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