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TMI Blog1990 (4) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... ry on business as contractors and execute civil construction works including construction of roads and bridges under different departments of the Central and State Governments and corporations. Such works include excavation of earth, drilling, constructions of water channel and river-bank protection. These are indivisible works. contracts involving works and labour and sometimes involving labour only or labour and carriage only. Up to March 31, 1984, no tax was payable for such works contracts under the Bengal Finance (Sales Tax) Act, 1941 (we shall call it "the 1941 Act" hereinafter). Subsequent to insertion of clause (29A) in article 366 of the Constitution of India by the Constitution (Forty-sixth Amendment) Act, 1982, section 61) was inserted in the 1941 Act by the West Bengal Act 4 of 1984. Certain consequential rules have also been inserted in the Bengal Sales Tax Rules, 1941 ("the 1941 Rules", in short). As the applicants were previously not registered as dealers under the 1941 Act, they purchased stores and materials on payment of sales tax from registered dealers. After the amendment of the 1941 Act in 1984, the Commercial Tax Officer concerned computed the contractual tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the works contract. Knowing that he is not required to immediately pay the price of such goods, the contractor submits his tender quoting a particular figure for the entire work. According to the terms of the contract, goods so supplied by the contractee must be used in the works undertaken by the contractor, the surplus, if any, being returnable to the contractee. The property in such goods remains the property of the contractee, while custody thereof passes from the contractee to the contractor for a certain period only. The real total value of the entire contract is the value excluding the cost of the goods so supplied by the contractee. No sale or transfer of property in goods is involved and no deemed sale takes place within the meaning of section 6D. A contractor is not a dealer within the meaning of the 1941 Act and is not liable to pay tax in respect of goods used in a works contract either under section 6D or 6C or in view of the amended definition of "dealer" in section 2(c). It is claimed that no sales tax or purchase tax is exigible on the value of goods used for execution of such a contract (sales tax having been once realised by the selling dealer from the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egislature has allegedly no competence to impose purchase tax under entry 54 of List II of the Seventh Schedule. On such allegations, the applicants want sections 6C, 6D and the amendments effected in the year 1984 to sections 7 and 2(c) of the 1941 Act and the relevant rules of the Bengal Sales Tax Rules, 1941, to be declared ultra vires, all proceedings taken in pursuance thereof to be cancelled and quashed and the respondents to be restrained from levying or collecting tax under sections 6C and 6D. 6.. The respondents have defended the statutory provisions complained of and the actions taken in pursuance thereof by contending that a sale or transfer of property in goods is involved in the execution of a works contract and that the goods supplied by the contractee to the contractor for value deducted from the bill for use in the execution of the contract is a sale and the property in such goods is transferred in the course of execution of the works contract. The agreement contains a term that surplus, if any, of goods supplied by the contractee will be returned to him and he will not charge any value for the returned goods. According to the respondents, the questions raised her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and carriage of goods and materials and price of firewood and other expenses of this nature cannot be included in the contractual transfer price under section 6D. (v) Expenses on account of travelling, designing, procuring materials, equipments and services, octroi, entry tax, transit insurance, storage of materials and equipments, fabrication at site, assembling, supervision of erection and construction, maintenance during guarantee period, overheads and profit and such other numerous items of expenses cannot be included in the contractual transfer price under section 6D. For example, reference may be made to the case made out in paragraph 7 of the affidavit-in-reply in RN-34(T) of 1989. (vi) Expenses including royalty incurred by a contractor for supply of boulders, stone chips and such other materials for execution of a works contract cannot be included in the contractual transfer price. No sale or purchase is involved in such transactions and the contractor is not a dealer under section 2(c) for such supplies. Reliance was placed on behalf of the applicants on [1977] 40 STC 23 (Cal) (Nepal Chandra Banerji v. Commercial Tax Officer). (vii) Goods declared to be of special ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the tax payable by him under section 5 and section 6B, if any, be liable to pay from the 1st day of April, 1984, a tax at the rate specified in sub-section (3) of such part of his contractual transfer price as specified in sub-section (2); (ii) every dealer, other than a dealer referred to in sub-clause (i), whose contractual transfer price during any year ending on or after the 1st day of April, 1984, exceeds rupees two lakhs shall, in addition to the tax payable by, him under section 5 and section 6B, if any, be liable to pay from the first day of the year immediately following such year a tax at the rate specified in sub-section (3) of such part of his contractual transfer price as specified in sub-section (2); (iii) every dealer who has become liable to pay tax under sub-clause (i) or sub-clause (ii) shall continue to be so liable until the expiry of three consecutive years during each of which the contractual transfer price does not exceed rupees two lakhs and on the expiry of such three years his liability to pay such tax shall cease. (iv) every dealer, whose liability to pay tax has ceased under the provisions of sub-clause (iii), shall, if the contractual transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Act or in the West Bengal Sales Tax Act, 1954, tax shall be levied on such commodities under this section." Relevant extract of section 2(c), as amended in the year 1984. "'dealer' means any person who carries on the business of selling goods in West Bengal or of purchasing goods in West Bengal in specified circumstances or any person making a sale under section 6D......." Relevant extract of section 7 including the amendments of the year 1984. "7. Registration of dealers.-(1) Subject to the provisions of section 8A, no dealer shall, while being liable to pay tax under section 4, section 6C or section 6D of this Act, carry on business as a dealer unless he has been registered and possesses a registration certificate: Provided that a dealer liable to pay tax under section 4 or section 6C or section 6D shall be allowed two months' time from the date from which he is first liable to pay such tax to get himself registered." 9.. The judgment of the Supreme Court in the case of Builders Association of India was rendered on March 31, 1989 and subsequently reported in [1989] 73 STC 370. The writ petitions giving rise of RN cases 30(T), 31(T), 34(T), 367(T) and 138(T) were orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of article 286 (see page 403 of the said report). 10.. On the authority of the said decision in the case of Builders Association of India [1989] 73 STC 370 (SC) the constitutional challenges to section 6D of the 1941 Act are already settled, except the questions urged in these cases. The 1984 amendments to sections 2(c) and 7 as also section 5 of the 1941 Act flow from and give effect to section 6D. The relevant rules concerning those sections were framed or amended for carrying out the purpose of section 6D. Accordingly, as far as sections 6D, 2(c), 5 and 7 and the rules are concerned, we are required to decide the only constitutional question pressed at the hearing regarding alleged discrimination in the matter of use of declaration forms. 11.. Sub-section (3) of section 6D lays down that the tax will be at the rate of four per cent of such part of the contractual transfer price as specified in sub-section (2) of that section. Explanation 1 to section 6D defines the expression "contractual transfer price". Similarly, the term "goods" is defined in explanation 2. Section 4 of the 1941 Act is the charging provision which lays down the incidence of taxation in all cases of sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the challenge to section 6D under article 14 is not at all sustainable. According to Mr. S.N. Dutta, the facility of use of declaration forms at the time of purchase is a mere concession and not a right. The contractors who are dealers under section 6D belong to a separate class and classifying them as such is reasonable and also the differentia has a rational nexus with the object sought to be achieved, namely, raising revenue. In this connection, he referred to the fact that the tax rate is only four per cent in their cases, while the general rate is eight per cent under section 5(1)(e), and tax at that concessional rate of four per cent is payable, only when the turnover exceeds Rs. 2 lakhs. He further pointed out that the other dealers who enjoy the concession of use of declaration forms are required to pay at least two per cent or one per cent tax at even a lower level of turnover. Mr. P.K. Chakraborty submitted that contractors are generally considered to be belonging to an economically superior class of dealers, compared to other classes. There is no discrimination under section 6D between one contractor and another. All contractors have been treated alike. According to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and they are governed by almost a self-contained code envisaged in section 6D. We agree with Mr. S.N. Dutta's contention that in the hands of the contractors the goods do not roll into the hands of different tiers of resellers, resulting in the absence of any further scope for earning sales tax at subsequent stages of sales. By fixing the tax rate at four per cent and that too at the minimum of a turnover of Rs. 2 lakhs, the Legislature has adequately taken care of the principles of equality and reasonableness guaranteed by article 14. We do not think that this is a fit case where the court should interfere with the legislative wisdom. It is now well-recognised that the judicial veto is to be exercised only in cases that leave no room for reasonable doubt and that constitutionality is presumed (see [1989] 74 STC 102 (SC) Federation of Hotel Restaurant Association of India v. Union of India). Thus, we hold and declare that section 6D and its allied provisions like sections 2(c), 5 and 7, and also the relevant rules are valid and constitutional. 14.. The next question of great moment is whether or not the value of the goods, i.e., stores and materials, supplied by the contractee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rates specified in the said schedule or memorandum may be set-off or deducted from any sums then due, or thereafter to become due to the contractor under the contract, or otherwise, or against or from the security deposit, the proceeds of sale thereof; if the same is held in Government securities, the same or a sufficient portion thereof being in this case sold for the purpose. All materials supplied to the contractor shall remain the absolute property of Government, and shall at all times be open to inspection by the Engineer-in-Charge. Any such materials unused and in perfectly good condition at the time of the completion or determination of the contract shall be returned to the Engineer-in-Chief's store, if by a notice in writing under his hand he shall so require; but the contractor shall not be entitled to return any such materials unless with such consent, and shall have no claim for compensation on account of any such materials so supplied to him as aforesaid being unused by him, or for any wastage in or damage to any such materials." Under clause 18 appearing at pages 17 and 18 of the said form, the contractor is obliged to supply at his own cost all other materials ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be treated as a part of the taxable turnover." Having done so, Dr. Pal submitted that since the State of West Bengal was represented before the Supreme Court in that case by the learned Advocate-General of the State, the argument on behalf of the States recorded at page 395 of the Report ought to be construed as a concession made also on behalf of the State of West Bengal. In other words, Dr. Pal contended that the States including the State of West Bengal had conceded before the Supreme Court that goods supplied by the contractee for the purpose of execution of a works contract shall not be included in the taxable turnover, which means that value of such goods shall not be computed while calculating "contractual transfer price" under section 6D. Dr. Pal of course fairly submitted that the Supreme Court did not express any views on that question. Dr. Pal and Mr. A.K. Roy Chowdhury, both appearing for the applicants, referred to the decision of S.C. Sen, J., of the Calcutta High Court in the case of Federation of Contractors' Association, reported in [1987] 20 STA 410. The learned Judge referred to the affidavit filed in that case on behalf of the Revenue. It was stated therein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein went against the appellants. Then it was argued on behalf of the appellants in the remaining three appeals that the earlier judgment was per incuriam and did not bind those appellants or the court, and it was open for them to argue the appeals on merit. The Supreme Court rejected this contention. 16.. Mr. Dutta, the learned advocate and Mr. P.K. Chakraborty, learned State Representative, both appearing for the respondents, opposed the contentions of the applicants. They submitted that no concession was at all made before the Supreme Court in [1989] 73 STC 370 (Builders Association of India v. Union of India) on behalf of the State of West Bengal and that the decision in [1987] 20 STA 410 (Federation of Contractors' Association) merely referred to the goods supplied to the contractor free of cost, namely, goods for which no amount is debited to the contractor's account or no amount is deducted from the contractor's bill. They of course. clearly conceded before us that the value of the goods supplied free of cost to the contractors for the execution of works contracts shall not be included in the taxable turnover, i.e., contractual transfer price. They explained that by "fre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as already discussed, shall be excluded from the taxable turnover or the contractual transfer price. Hence, we are called upon to decide the question as to whether the goods supplied to the contractor against value or price deducted from or adjusted with the dues of the contractor should or should not be included in the taxable turnover. We have already noticed that according to the agreement entered between the contractee and the contractor in the instant class of cases, the contractor has to pay the price of the goods supplied by the contractee, may be by way of adjustment. Before we proceed to examine the authorities relied on by the parties on this question, we may quote the following passage from the judgment reported in [1989] 73 STC 370 (SC) (Builders Association of India v. Union of India), at pages 400 and 401: "Ordinarily unless there is a contract to the contrary in the case of a works contract the property in the goods used in the construction of a building passes to the owner of the land on which the building is constructed, when the goods or materials used are incorporated in the building. The contractor becomes liable to pay the sales tax ordinarily when the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ented by the cash payments received by the assessee-firms from the M.E.S. department exclusive of the cost of the material/stores received for being used, fixed or incorporated in the works undertaken by them." Accordingly, we are unable to accept the contention of the applicants that this decision is an authority in support of their claim that property in such goods does not pass from the owner/contractee to the contractor. The ratio decidendi of this judgment is wholly alien to the controversy raised in the instant cases. In the case of Goel Co. the Full Bench of the Madhya Pradesh High Court distinguished this very decision in [1978] 115 ITR 524 (SC) (Brij Bhushan Lal Parduman Kumar v. Commissioner of Income-tax) on identical grounds (see [1989] 72 STC 370 to 375). The Supreme Court itself also did so in [1989] 72 STC 368 (Goel Co. v. Sales Tax Officer) at pages 381 and 382. 20.. It was persistently argued on behalf of the applicants that goods supplied by the owner/contractee and used in the execution of a works contract always remain the property of the owner/contractee, both in principle and in terms of the specific clause in the works contract (already reproduced) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above. Section 3 of the Entry Tax Act of that State is the charging section under which entry tax is levied on the entry in the course of a business of a dealer of goods specified in Schedule II for consumption, use or sale therein; and on the entry of goods specified in Schedule III for consumption or use of such goods as raw material or as packing material or in the execution of works contracts but not for sale therein. Iron and steel are in Schedule II and cement is in Schedule III and they are assessable to entry tax. Under section 6(c) of the Entry Tax Act when a dealer purchases goods, specified in Schedules II and III in a local area from a person or an unregistered dealer, the presumption is that the entry had been effected by him into such local area before they were purchased by such dealer. The petitioner's counsel had conceded before the High Court that under the circumstances of the case it could be presumed that the petitioner had effected the entry of iron, steel and cement which were supplied to it by the PWD, into the local area for consumption, use or sale therein. Even after this concession, the High Court said that the question still remained for determination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot given per incuriam within any of these meanings. We cannot agree with Dr. Pal that the question whether there was a sale did not require a decision of the court in view of the concession made. The High Court and the Supreme Court clearly held that the said question did require a decision and the decision was actually given. So, the second contention also falls through. True, the decision was given in the context of entry tax and a different statute. But the question whether or not there was a "sale" within the meaning of section 2(n) of the M.P. General Sales Tax Act was the substantial issue in that case. So, the issue was identical with that in the instant batch of applications. Thus, having rejected all the objections raised on behalf of the applicants, we hold that the ratio of the judgment of the Supreme Court in [1989] 72 STC 368 (Goel Co. v. Sales Tax Officer), is squarely applicable to these cases. Reliance was placed on [1975] 36 STC 414 (MP) (Commissioner of Sales Tax v. Mohammad Zahoor) on behalf of the respondents. No further discussion of that decision seems necessary in view of our discussion in the foregoing paragraph. Similar is the case with [1971] 27 STC 478 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he contractee to the contractor and the other vice versa. Reliance was placed on behalf of the respondents on the Supreme Court's judgment in the case of Builders Association [1989] 73 STC 370, quoted in paragraph 18 above. It was declared therein that ordinarily, unless there is a contract to the contrary, the property in the goods used in the construction of a building passes to the owner of the land, when the goods used or incorporated in the building. Reliance was also placed by the respondents on [1961] 12 STC 147 (Bayyana Bhimayya Sukhdevi Rathi v. Government of Andhra Pradesh) in which it was held by the Supreme Court that two sales take place at the moment of delivery of goods by the mills to the third parties against kutcha delivery orders, one being by the mills to the gunny dealers represented by the agents, and the other, by those dealers to the third parties as buyers. We, however, do not find any conflict between the two decisions of the Supreme Court reported in [1989] 72 STC 368 (Goel Co. v. Sales Tax Officer), on the one hand and in [1989] 73 STC 370 (Builders Association of India v. Union of India) on the other, as contended by Dr. Pal. Accordingly, we do not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other than those in the course of inter-State trade or commerce. Section 6D was enacted under entry 54 read with article 366(29A)(b). Therefore, if something is not "goods", the question of imposing tax on sales or deemed sales thereof by a legal fiction does not arise at all. Section 2(d) of the 1941 Act defines "goods" thus: "'goods' includes all kinds of movable property other than actionable claims, stocks, shares or securities". Explanation 2 to section 6D, quoted previously, will show that "goods" includes commodities exigible to tax under the West Bengal Sales Tax Act, 1954. A reference may perhaps be made also to the definitions of "goods" in article 366(12) and the Sale of Goods Act, 1930. Things like fuel and firewood are no doubt "goods", but as soon as those are used in the course of execution of a works contract, they lose their character of "goods" qua goods or in any other form. So, it is not conceivable in law that transfer of property in fuel and firewood used/ consumed in the execution of a works contract takes place in the event of their use. Such goods, when consumed, become formless, for which the deemed sale thereof under section 6D is not possible. The amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sted from bills/dues of the contractor are liable to tax under section 6D, forming a part of the CTP. Such goods will come under the expressions "purchased" and/or "procured otherwise" used in explanation 1 to section 6D. In view of the relevant provisions discussed in the foregoing paragraph, and in view of the concession made, we hold that the amount of profit and cost of fuel and firewood consumed in the execution of a works contract cannot be a component of the CTP. Rule 48B clearly envisages these deductions. We further hold that, in view of explanation 1 and rule 48B, cost of freight and delivery for carrying such goods to the worksite shall form part of the CTP. Obviously, the Legislature has considered these costs as part of valuable consideration for the transfer of property in goods used in the execution of a works contract. Learned advocates for the applicants did not submit that such inclusion is in any way bad or unconstitutional. Expenses incurred on account of labour simpliciter surely cannot form a part of the CTP, simply because it is not a value of or valuable consideration for any "goods", unless such expense amounts to cost of freight or delivery for carrying th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een reproduced. The manner of execution of the works contract was by way of filling up earth on the riverside which was to be protected by boulders and bitumen. The required quantity of boulders were collected by the contractor from Raidak river-bed belonging to the Forest Department. Upon a request from the Executive Engineer, Irrigation Department, permit was issued by the Forest Department to the contractor on the basis of his application and on payment of due royalty by him. It is claimed that the contractor had no discretion in using the boulders in some other work or in disposing of the same. So, allegedly the boulders remained the property of the State Government at all material times and property therein never passed in favour of the contractor. Therefore, realisation of sales tax from the applicant on the amount of royalty paid was without the authority of law. Annexure "A" to the application consists of two letters. One is addressed by the Irrigation Executive Engineer to the Divisional Forest Officer by which he forwarded the application of the contractor. In doing so, the Engineer said that the contractor had been appointed for execution of the said work and mentioned t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply thereof to the P.W. Department, which is another department of the State, did not amount to a "sale". Accordingly, demand of sales tax on such supply was held to be without authority of law. The Division Bench while disposing of the appeal confirmed the said judgment and held that there was no passing of property in the stones from the State Government to the contractor and there was no contract for sale of the stones. In doing so, the Division Bench relied on [1970] 26 STC 38 (SC) (Commissioner of Sales Tax v. Purshottam Premji). It was argued on behalf of the applicants that as far as the applicant, Nepal Chandra Banerji, is concerned, the respondents cannot now agitate the point afresh. On behalf of the respondents two-fold contentions were made, namely, that this Tribunal being of co-ordinate jurisdiction may or may not agree with the decisions rendered by the High Court and that the instant cases having arisen from new causes of action, the matter can be reagitated. On facts of the illustrative case as stated in the foregoing paragraph, there is some amount of difference with the case decided in [1977] 40 STC 23 (Cal) (Nepal Chandra Banerji v. Commercial Tax Officer) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision rendered in those facts and circumstances can be applied to the instant cases. The above judgments of the Calcutta High Court relied on by the applicants proceeded on the footing that different departments are meant for distribution of works of the same Government and, therefore, payment of royalty for removing stones for using in the work of another department of the same State, Government could be no transfer of property in the goods to the contractor. Respectfully we are unable to agree with this position. In this connection reference may be made to article 166 of the Constitution which requires rules to be framed for convenient transaction of Government business of the State and for allocation of such business amongst Ministers. These are commonly called Rules of Business. If royalty is payable to the Forest Department, it is so done in view of the Rules of Business. If the contractor has been paid for his work including the supply of stones by the Irrigation Department, it is so done by virtue of the Rules of Business. Thus, although the two departments are of the same Government, they are not intended to be treated as one and the same for all intents and purposes. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emed sale in the course of execution of a works contract. Mr. A.K. Roy Chowdhury, learned advocate for the applicants, submitted at the stage of reply that the decisions in [1977] 40 STC 23 (Cal) (Nepal Chandra Banerji v. Commercial Tax Officer) and of the Appeal Court would operate like res judicata against the respondents. He referred to [1984] 149 ITR 609 (Commissioner of Income-tax v. Shri Agastyar Trust) and drew our attention to page 621 of the report. The Madras High Court held in that case that though the principle of res judicata cannot strictly apply to the decisions rendered in proceedings under the Income-tax Act on a reference, they have a binding effect both on the assessee as well as the Revenue if the point on which the decision has been given is the same. It was further held that it is well-established that the decision on the question as to whether a certain trust is a charitable trust or not, which has nothing to do with fluctuations in the income, year after year, will operate as res judicata and the same question cannot be subsequently reagitated. Since this argument was advanced at the stage of reply, there was no scope for counter-reply from the side of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appropriate chips and stones extracted by him. There was no restriction on the sale of chips and stones collected by the assessee from the quarry to others. The assessee had undertaken to supply stones and chips to the PWD which had undertaken to supply explosives for blasting the quarry for a price and even charged four per cent of the cost of explosives as storage charge. The question was whether the transaction between the assessee and the PWD was a sale as defined in the Orissa Sales Tax Act, 1947. It was held by the Full Bench that the conditions in the contract made it clear that the assessee, who was the owner of the goods, sold the same for a price to the PWD and the sale price therefor became exigible to tax. It was also held that if the assessee had undertaken a labour contract, he would not have had to pay royalty particularly when the quarry belonged to the State. Payment of royalty is in lieu of the right to exploit as also appropriate. In the cases before us or in the case under illustration the applicants have not drawn our attention to any term in the contract to the effect that there was restriction or absolute restriction on the sale or disposal of stone material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant to the contractee-company for consideration and, therefore, there was a sale liable to sales tax. In that case therefore, the facts were rather favourable to the assessee, because even royalty was not being paid for use of the earth. Earth was given free of cost. Even then the Supreme Court held that there was a transfer of property in the earth in favour of the contractor. We do not find enough reasons to distinguish this case on facts for holding that the ratio thereof is not applicable to the instant cases. We are of the view that the ratio of this case is properly applicable here. A reference was made in [1980] 46 STC 422 (Orissa) (State of Orissa v. B.P.R. Construction) to the case of State of Madhya Pradesh v. Orient Paper Mills Ltd. [1977] 40 STC 603 (SC). There, under a document said to be a lease, the mill was permitted on annual payment of royalty to the State Government to cut and remove bamboo and salai wood from the forest of the State Government. The question arose whether the transaction was sale of goods. It was held that the question was not so much as to what nomenclature would aptly describe the deed but as to whether the deed resulted in a sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act. 31.. We now come to the challenges to section 6C of the 1941 Act. These challenges, as mentioned in paragraph 7 of this judgment, were agitated in the applications under consideration, but were not argued or pressed at the hearing. We have already indicated our findings on section 2(c) and also with regard to supply and use of boulders and other stone materials in the execution of works contracts. Except declared goods within the meaning of and to the extent prescribed in sections 14 and 15 of the Central Sales Tax Act, 1956, there is no restriction or limitation on the legislative competence to impose purchase tax, in addition to sales tax. It may be noted that purchase tax under section 6C was imposed with effect from April 1, 1979 and only up to March 31, 1984, vide sub-section (4), so that the contractors do not have to pay purchase tax during the period when they are required to pay sales tax under section 6D with effect from April 1, 1984. A dealer whose notified purchase price under section 6C exceeds rupees two lakhs belongs to a class different from that of a dealer whose notified purchase price is less than that sum. The former belongs to an economically superior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition of purchase tax under section 6C is valid and constitutional. (c) Works contracts are now divisible and prices of goods supplied by a contractor in the execution of a works contract are exigible to tax under section 6D. (d) Value of stores/materials supplied by a contractee like a Government department or corporation for execution of works contract is to be included in the CTP under section 6D, unless the goods are supplied free of cost, as explained already. (e) Charges for labour simpliciter are not to be included in the CTP but cost of freight and delivery by carriage of goods to the worksite are to be included therein. If labour charge amounts to cost of freight or delivery by carriage of goods to the worksite, then it will be included in the CTP. Price of fuel and firewood used/consumed in the execution of works contract will not be included in the CTP. (f) Profit will not be included in the CTP under section 6D. (g) No blanket decision or determination can be given or made by us on hypothetical cases. Various charges and expenses mentioned in the instant applications should be agitated at the level of assessing authority and, if need be, at the levels above ..... 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