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TMI Blog1992 (4) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... Madhya Pradesh, Uttar Pradesh and Maharashtra, but the second respondent and its officers are refusing to permit the petitioners to issue "C" declaration in relation to goods and materials purchased for their use in their execution of works contract. According to the petitioners, this resulted in the escalation of the cost of material and place the petitioners in an uncompetitive position as against dealers in the other States as well as those buying and selling the goods within the State. The petitioners claim that they are engaged in the construction, building and handing over on turnkey basis several mechanical, civil and electrical works under contract entered into with various Governments, quasi-Governmental undertakings and public sector institutions for the construction of dams, buildings, installation of power stations, cooling towers, etc., besides contracts with various Electricity Boards and Railways. For the said purpose, it is stated that the petitioners have to purchase cement, steel, electrical goods, mechanical equipment, machineries, accessories etc. (iii) Reference is made to the amendment introduced to the Constitution by the Constitution (Forty-sixth Amendment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 9377 of 1989: The petitioners in this writ petition engaged in the manufacture and contracting and handing over on turnkey basis several mechanical, also electrical and civil contracts with various Government departments, quasi-Government undertakings and other public sector institutions, besides Electricity Boards and Railways, have filed the writ petition for a writ of mandamus seeking relief on the same terms as the petitioner in W.P. No. 9376 of 1989. It is claimed that the petitioners are already registered dealers under the Central Sales Tax Act, 1956 and the Tamil Nadu General Sales Tax Act, 1959. In all other respects, the grounds urged for the petitioners in the affidavit are almost similar to the one in the other writ petition. III. W.P. No. 2023 of 1990 has been filed for a writ of certiorarified mandamus to call for the records and quash the proceedings of the first respondent in Asst. No. 678075/89-90 dated November 3, 1989 and consequently direct the first respondent to issue "C" forms against the application dated November 2, 1989. (i) Under the impugned order, the first respondent informed the petitioner that unless the provisions of the Central Sales Tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h permission is granted has no justification for the petitioners to have the same treatment in this State from the authorities of the Sales Tax Department in the State of Tamil Nadu. It is also claimed that inasmuch as the petitioners have sought for the issue of "C" forms admittedly for the purchase of goods for use in the execution of works contract, the denial of issue of "C" forms is quite in accordance with law and the Constitution amendment by itself does not permit and does not also come to the rescue of the petitioners in the situation under consideration. It is also contended for the respondents that there has been no discrimination between two types of dealers and the denial of issue of "C" forms does not violate article 14 of the Constitution of India. It is also contended that the amendment of definition of sale [in] the Tamil Nadu Act equally does not enure to the benefit of the petitioners to obtain "C" forms or the use of the same for purchase of goods at concessional rates for being used in the execution of works contract. 4.. In W.P. No. 9377 of 1989 also, a counter-affidavit has been filed taking the same line of defence. 5.. So far as W.P. No. 2023 of 1990 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase goods for purposes noticed in the registration certificate by the use and issue of "C" forms. 7.. In support of his submissions and the relief sought for, the learned counsel also relied upon the following judicial pronouncements, In Unitech Ltd. v. Commercial Tax Officer [1991] 83 STC 207, a Division Bench of the Andhra Pradesh High Court held that a dealer engaged in the execution of works contract is entitled to the supply of "C" forms and the question as to whether a particular "C" form has been correctly used or not does arise for consideration only at a later stage. The learned Judges were also of the view that after the 46th Amendment to the Constitution of India, the goods used in executing works contract are deemed to be sold and, therefore, there would be a sale of the material used in execution of the works contracts. In Commissioner of Sales Tax v. Imphalbs Manufacturing Co. [1972] 29 STC 450, a Division Bench of the Madhya Pradesh High Court while construing section 7(1) and 7(2) held that while section 7(1) casts an obligation on a dealer liable to tax under the Central Sales Tax Act to get himself registered, section 7(2) enables the dealer liable to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (f) of clause (29A) of article 366 of the Constitution of India are subject to the restrictions and conditions mentioned in clause (1), clause (2) and sub-clause (a) of clause (3) of article 286 of the Constitution of India and the transfers and deliveries that take place under sub-clauses (b), (c) and (d) of clause (29A) of article 366 of the Constitution of India are subject to an additional restriction mentioned in sub-clause (b) of article 286 (3) of the Constitution of India. 9.. Mr. D. Srinivasan, learned Additional Government Pleader (Taxes) while reiterating the stand taken in the counter-affidavit, contended that fixation of rates of tax and determination of liability involves substantial rights and that section 7(1) and 7(2) is meant for registration purposes only and not for any other purpose and the fact that a person was registered as a dealer does not ipso facto entitle him to get the supply of "C" forms. It was also contended that what is not sale within section 2(g) of the Central Sales Tax Act, 1956, cannot be plugged into it and the factum of registration cannot be pressed into use beyond its object so as to deal with substantial rights too in the matter of cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s used in sections 3(a) and 4(2)(a) and (b) had to be given and the word, in the context of those provisions was wide enough to include not only a concluded contract of sale, but also an agreement of sale provided that the latter (contract) stipulated that there was a transfer of property or movement of goods. The Apex Court also reiterated in this decision the fundamental principle that the definition of "sale" and "agreement to sell" in the Sale of Goods Act, 1930, would not apply to the expression "sale" occurring in the Central Sales Tax Act, 1956. In my view, this approach was on account of the basic principle that the Parliament was never considered to lack the required constitutional authority or legislative competency from the lack of which the State Legislatures were uniformly held to suffer necessitating the constitutional 46th Amendment. The definition of sale in section 2(g) of the Central Sales Tax Act, 1956, is so wide to take within it and encompass all those transactions which the State Legislatures had to specifically provide for after the Forty-sixth amendment to the Constitution of India entitled them to do and there was absolutely no need for any amendment or in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommerce could be resold locally and the resale need not necessarily be by means of another inter-State sale. If therefore under the local sales tax law of the appropriate State, as has been held by the Apex Court in Builders Association of India's case [1989] 73 STC 370, the States are entitled to levy sales tax on the price of goods and materials used in works contracts as if there was a sale of such goods and materials, the dealers like the petitioners become entitled to purchase materials for their use in the execution of the works contracts by the issue of the "C" forms, notwithstanding the Central Amendment Act No. 31 of 1958. In the light of my above conclusion, it is unnecessary for me to deal with the plea of alleged violation of article 14 of the Constitution of India. 12.. That apart, in my view, the petitioners are entitled to have themselves registered as dealers under section 7(2) and consequently are entitled to the supply of "C" forms for use in their purchase of goods in the course of inter-State sale or trade or commerce at the concessional rate. The further question whether the goods have been rightly purchased for any one of the approved and permitted purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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