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TMI Blog1987 (8) TMI 411X X X X Extracts X X X X X X X X Extracts X X X X ..... (Act 18 of 1985) came into force, inasmuch as under the said Act transfer of property in the goods used in execution of works contract was made liable to sales tax. This amendment of the "APGST Act" was in consequence of the Constitution (Forty-sixth Amendment) Act, which came into force on 3rd February, 1983, necessitated by the decision of the Supreme Court in Gannon Dunkerley's case [1958] 9 STC 353 and the decision of this Court in Hotel Dwaraka, Hyderabad v. Union of India [1985] 58 STC 241. In the writ petitions, two points are canvassed: (1) Whether in view of the provisions of article 286(3)(b) as amended by the Constitution (Forty-sixth Amendment) Act, the levy of tax on works contracts is constitutionally valid, inasmuch as the Parliament had not by law specified the conditions, restrictions and other incidents subject to which the State Legislature was empowered to impose tax on works contracts; and (2) In any event, before the coming into force of the amendments to the Andhra Pradesh General Sales Tax Rules, 1957 ("the Rules") introduced by G.O. Ms. No. 1445, Revenue (H) Department, dated 5th November, 1986 published in the Official Gazette dated 25th November, 1986, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o specify by law any conditions, restrictions and other incidents subject to which the State Legislature could make laws for the levy of sales tax on the goods used in the execution of the works contracts. The correct position in law, according to us, is that if and when the Parliament in exercise of its power under article 286(3)(b) of the Constitution specifies by law any conditions, restrictions and other incidents, the extent to which the provisions of the State legislation is excessive of or repugnant to those conditions, restrictions or other incidents, it would be invalid and inoperative. This provision of law is analogous to that of the power of the Parliament to declare under section 14 of the Central Sales Tax Act, 1956, certain declared goods to be of special importance, in terms of article 286(3)(a) of the Constitution, by making additions or deletions from the list of such goods from time to time by amendment. We hold that the power of the State to make laws to levy sales tax on the transfer of property in the goods used or supplied in the execution of works contract is not dependent on the actual exercise of power of specifying conditions, restrictions or other incide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to section 13 of the APGST Act, effected by Act 18 of 1985 requiring dealers "liable to be registered", instead of "liable to tax" to file the returns. It is pointed out that by Act 19 of 1986, which came into force on 1st August, 1986, section 39(1)(aaa) was introduced conferring on the Government the rulemaking power to prescribe rules, inter alia, for computation of turnover in respect of goods used in works contracts; and that section 12 as amended makes registration mandatory for works contractors irrespective of the turnover; and sub-section (5) thereof makes registration to be a condition precedent to the doing of business by a dealer. It was also the contention before us by the petitioners that the amended rules had no retrospective effect; and, therefore, it is only on and after 25th November, 1986 on which date the amendment was published, taxable turnover could be ascertained, and tax levied and collected. According to the petitioners, the rules pertaining to the determination of the value of goods used or supplied in the course of the execution of the works contracts became necessary because though under section 2(s)(iii)(a) the assessing authority had the power to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er with respect to works contract had been prescribed, and it was only by the amendment of rule 17-B by rule 12 of the amending Rules that the submission of returns by a dealer in works contract was made obligatory and so also registration made necessary by amendment of rule 28 by amending rule 24. In our opinion, there is no substance in these contentions. As already pointed out by the Division Bench in Padmaja Commercial Corporation [1987] 66 STC 26 (AP), the three essential ingredients and components (the taxable event, levy point and rate of tax) are present in the Act with regard to all materials and goods relatable to the transactions. So far as the measure or the value of the goods used is concerned, it is something which could be available from the accounts of the assessee or from the information furnished by him or as assessed by the assessing authority. In view of the amended definition in clause (s) of section 2 of the Act, there could be no difficulty whatsoever to determine the measure or value of goods supplied or used in the execution of the works contract even in the absence of any rules in that behalf. May be that once the method for determining the turnover is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er could be determined, as already noticed, even without the aid of the amended rules, it would be idle to contend for the position that till the rules were so amended, section 5 of the Act in so far as it related to goods used or supplied in the execution of works contracts remained incomplete and unenforceable. Application for registration, submission of returns, etc., are all procedural matters, and irrespective of the fact that such procedure in relation to works contract has been prescribed or not, the liability of the dealer would exist unless a case is made out that without the aid of the rules which came into force on 5th November, 1986 (published in the Gazette on 25th November, 1986) it might not have been possible to ascertain the measure or the value of the goods used in the execution of the works contract for determining the turnover on which tax had to be paid; this has not been shown to be such a case; and therefore there is no force in the contention that though the Act had been amended, and the charging section enjoined payment of tax, the dealer was not liable to pay the tax because the amended rules has not been published till 25th November, 1986. For the foreg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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