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TMI Blog2007 (8) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the assessing authority. The same is rejected by the assessing authority. After such rejection, the assessing authority had issued a pre-assessment notice, proposing certain turnovers to be exigible to tax under the Kerala General Sales Tax Act, 1963 (hereinafter referred to as "the Act"). The view of the assessing authority is that the activity of the assessee would come within the meaning of the expression "works contract" and accordingly, had levied tax on the taxable turnover of the assessee. Aggrieved by the said order, the assessee had carried the matter in an appeal before the first appellate authority. The first appellate authority had allowed the appeal and had issued certain directions to the assessing authority to re-do the assessment in accordance with law and in accordance with the observations made in the course of the order. After the disposal of the appeal, the assessing authority had passed yet another order. In the said order, the assessing authority had once again levied the tax under the Act, treating the activity of the assessee as "works contract", which is exigible to tax under the Act. This order of the assessing authority was the subject-matter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... withstanding that the value may represent a small percentage of the amount paid for the execution of the works contract. Even if the dominant intention of the contract is the rendering of a service, which will amount to a works contract, after the Forty-sixth Amendment the State would now be empowered to levy sales tax on the material used in such contract. The conclusion arrived at in Rainbow Colour Lab's case [2000] 118 STC 9 (SC), in our opinion, runs counter to the express provision contained in article 366(29A) as also of the constitution Bench decision of this court in Builders' Association of India v. Union of India [1989] 73 STC 370.' 9.. We now proceed to consider the question as to whether the order of the first appellate authority directing to delete the levy of tax on the turnover involved in the works contract on the basis of the decision of the Rainbow Colour Lab's case [2000] 118 STC 9 (SC) is liable to be interfered with. In Associated Cement Companies' case [2001] 124 STC 59; [2001] 4 SCC 593 the honourable Supreme Court has categorically held that after the 46th Amendment of the Constitution the turnover representing works contract could be bifurcated so as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned, the same was never urged or argued either before the assessing authority or before the Tribunal. Under section 41 of the Act, this court can exercise its revisional powers, if the Tribunal has erroneously decided or failed to decide any questions of law. The questions of law B and C, formulated for our consideration and decision, were never urged or raised before the Tribunal. The Tribunal had no occasion to adjudicate those questions of law. In view of that, it cannot be said that the Tribunal had either failed to decide any questions of law or erroneously decided any questions of law. In that view of the matter, we do not intend to express any opinion on the questions of law B and C raised by the revision petitioner in this revision petition. In so far as the question of law A is concerned, Shri Raju Joseph, learned counsel appearing for the petitioner would contend that the Tribunal was not justified in relying upon the observations made by the apex court in Associated Cement Companies Ltd. v. Commissioner of Customs [2001] 124 STC 59; [2001] 4 SCC 593 to come to the conclusion that the activity of the assessee is exigible to tax on the ground that the said activity is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intellectual property which was obtained, considered in detail all the decisions including that in Rainbow Colour Lab [2000] 118 STC 9 (SC), and held that even though the decisions relating to levy of sales tax would have no application to the case of levy of customs duty, the decision in Rainbow Colour Lab [2000] 118 STC 9 (SC) required consideration, that the Forty-sixth Amendment was made precisely with a view to empower the State to bifurcate the contract and to levy sales tax on the value of the materials involved in the execution of the works contract, notwithstanding that the value may represent a small percentage of the amount paid for the execution of the works contract, that the conclusion arrived at in Rainbow Colour Lab [2000] 118 STC 9 (SC) ran counter to the express provision contained in article 366(29A) as also of the Constitution Bench decision of the Supreme Court in Builders' Association of India v. Union of India [1989] 73 STC 370. Associated Cement Companies Ltd. v. Commissioner of Customs [2001] 124 STC 59; [2001] 4 SCC 593, did not relate to sales tax, but to customs duty, and the question whether there is any sale of goods in a contract for supply of serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 005] 279 ITR 118 (SC); [2005] 5 RC 670; [2005] 8 SCALE 784 held that the aforesaid observations in Associated Cement [2001] 124 STC 59 (SC); [2001] 4 SCC 593 were merely obiter and that Rainbow Colour Lab [2000] 118 STC 9 (SC); [2000] 2 SCC 385 was still good law, it was not correct. It is necessary to note that Associated Cement Companies Ltd. v. Commissioner of Customs [2001] 124 STC 59 (SC); [2001] 4 SCC 593 did not say that in all cases of composite transactions the 46th Amendment would apply." In the said decision, the Supreme Court has accepted the view expressed by the apex court in Associated Cement's case [2001] 124 STC 59; [2001] 4 SCC 593. While saying so, it once again reiterated that the decision rendered in Rainbow Colour Lab's case [2000] 118 STC 9 (SC) has been subsequently overruled by the apex court and therefore, the levy of tax in respect of transfer of goods involved in the execution of works contract of the nature of work undertaken by a photographer in taking photographs, developing and printing films is now enforceable. In the instant case, the Tribunal has relied upon what was observed by the apex court in Associated Cement's case [2001] 124 STC 59; [20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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