1972 (3) TMI 79 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the contracts between the petitioner and the railways constitute "works contracts" or "sales of ballast."
2. Whether the petitioner is entitled to a refund of the sales tax paid for the years 1962-63 to 1969-70.
3. Whether the assessment orders for the years 1963-64 to 1969-70 are illegal, void, and unconstitutional.
4. Whether the petitioner can file a single writ petition for relief relating to several assessment years.
5. Whether the turnovers relating to such transactions can be taxed only to the extent of the price of ballast supplied or also include the labor charges.

Detailed Analysis:

1. Whether the contracts constitute "works contracts" or "sales of ballast":
The petitioner argued that the contracts with the railways were "works contracts" and not mere sales of ballast, thus exempt from sales tax. The court examined the nature of the contracts and the operations involved, concluding that the agreements were composite, involving both the supply of ballast and its stacking along railway lines. The predominant idea underlying these agreements was the supply of ballast of a specified size, with stacking being incidental to the supply. The court noted that the stacking was done under the supervision of railway engineers, not the contractor's skilled labor, indicating that the main object was the supply of ballast. Therefore, the contracts were deemed sales of ballast, not works contracts.

2. Whether the petitioner is entitled to a refund of the sales tax paid for the years 1962-63 to 1969-70:
The petitioner sought a refund of Rs. 1,17,271 paid as sales tax for the years 1962-63 to 1969-70, claiming the tax was paid under a mistake of law. The court dismissed this claim, noting that the petitioner voluntarily submitted assessment returns and paid the taxes without objecting to the levy at the time. The court emphasized that the assessment orders had become final long before, and the petitioner failed to adopt available remedies under the Act to challenge these orders.

3. Whether the assessment orders for the years 1963-64 to 1969-70 are illegal, void, and unconstitutional:
The petitioner contended that the assessment orders and the collection of tax were illegal, void, and unconstitutional. The court rejected this argument, stating that the petitioner had not produced any agreements before the assessing authority and had not objected to the levy of tax on the turnovers submitted in the returns. The court held that the assessment orders were valid and final.

4. Whether the petitioner can file a single writ petition for relief relating to several assessment years:
The respondents objected to the filing of a single writ petition for relief relating to several assessment years. The court did not find it necessary to determine this preliminary objection, as the petitions were dismissed on their merits.

5. Whether the turnovers relating to such transactions can be taxed only to the extent of the price of ballast supplied or also include the labor charges:
The court acknowledged that this issue was not fully argued before them and had not been canvassed before the appropriate authorities. Therefore, the court did not decide on this question but left it open for the petitioner to adopt available remedies if they believed they were entitled to a refund of the portion of tax representing labor charges.

Conclusion:
The court concluded that the agreements in question amounted to sales of ballast and not works contracts. Consequently, the petitioner was rightly assessed on the turnover of the supply of ballast. The writ petitions were dismissed with costs, and the petitioner was advised to pursue other remedies if they believed part of the turnover representing labor charges should not be taxed.