1999 (7) TMI 670 - HC - VAT and Sales Tax

Summary

Issues Involved:
The judgment involves the interpretation of Section 3-F of the U.P. Trade Tax Act regarding the taxation of turnover in works contracts and the exclusion of goods already covered by the Central Sales Tax Act.

Details of the Judgment:

Issue 1: Taxation of Turnover in Works Contracts
The revisionist, a dealer, moved goods from Delhi to U.P. for a works contract awarded by the Garrison Engineer in Dehradun. The assessing officer initiated proceedings for U.P. sales tax, estimating turnover for the years 1988-89 and 1989-90. The contention was that central sales tax had been charged on goods used in the contract, and the rest represented labor value not taxable under the U.P. Sales Tax Act. The assessing officer considered the turnover taxable under Section 3-F of the Act, upheld by the appellate authorities and the Tribunal.

Issue 2: Exclusion of Goods Covered by Central Sales Tax Act
Goods brought from Delhi to U.P. for the works contract had central sales tax paid on them. Authorities argued that since the works were executed in Dehradun, the value of these goods was taxable. However, the law provides for the exclusion of goods covered by Sections 3, 4, and 5 of the Central Sales Tax Act. The movement of goods from Delhi to U.P. for the contract fell under Section 3 of the Central Sales Tax Act, making the sale value not subject to U.P. sales tax. Citing precedent, the court held that the completion of the sale in U.P. was irrelevant.

Conclusion:
The Tribunal's order was found legally unsustainable. The revision petitions were allowed, setting aside the assessments for the years 1988-89 and 1989-90 to be remade in accordance with the law. The revisionist was awarded costs for each petition.