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TMI Blog2013 (11) TMI 771X X X X Extracts X X X X X X X X Extracts X X X X ..... MI 254 - SUPREME COURT OF INDIA) - The High Court of Madhya Pradesh has rightly held that goods used in process of sizing of yarn is transferred to the contractee and is liable to tax. Consequently we find that no error or fault could be found in the impugned order passed by Divisional Deputy Commissioner in revision petition and we hold that according to 46th amendment of Constitution of India as already held above, the State Governments are empowered to the levy tax on the goods transferred otherwise than in pursuance of contract i.e., in execution of work contract and hence undoubtedly the State is entitled to levy tax on the value of material involved in the execution of job work/work contract - Decided against assessee. - Writ Petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per instructions of petitioner company and in return the company received process charges or job work charges. In the process, the petitioner company requires and uses chemicals and dyes, which are purchased as consumable goods. And for assessment year 2003-04 the original assessment order was passed on 29.01.2007, whereby the Assessing Officer had levied Commercial Tax on the value of the chemicals, dyes and packing material consumed while treating the grey cloth, as sale u/S.9 of the Act. Besides the Assessing Officer also levied tax u/S.9-B of the Act on the estimated value with addition of dyes and chemicals consumed in the processing of grey cloths used for manufacture on job work basis. Thus the tax u/S. 9 was levied in addition to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 (Annexure-P/1) may be set aside holding that the petitioner is not liable for any tax under Section 9 and 9-B of the Commercial Tax Act, 1994 on the value of chemicals and dyes used/consumed in processing of grey cloths on job work. 04. Counsel for the respondents/State of the other hand, has vehemently urged the fact that the petitioner is liable to pay the tax in accordance to the amendment of Constitution of India i.e. vide 46th Constitutional amendment. According to the amendment sale element to those contracts, which are covered by sub-clauses of Clause (29-A) of the Article 366 are separable and may be subjected to sales tax by the States under Entry No.54 of List II and there is no question of dominant nature test applying after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Tax, M.P. Indore (2005) 35 TLD 398 (Board) and Gannon Dunkerley Co. Vs. State of Rajasthan (1993) 11 TLD (SC) and Cooch Bihar Contractors Association (1996) 103 STC 477 (SC) to state that all these cases were prior to the 46th amendment and, therefore, not applicable. Counsel for the respondent has further contended that it was the material used in the execution of work contract that is liable to tax as held in the matter of Neelam Textiles Industries Vs. Additional, Sales Tax Officer (2000) 25 TLD 76 (MP) by the High Court of M.P. that sizing of yarn on job basis is a works contract and the material used in execution of works contract is liable to tax. Whereas in the instant case even if Section 2 of the Central Sales Tax Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as goods or in some other form, involved in the execution of a works contract; (iii) ------------------------- (iv) ------------------------- (v) ------------------------- and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and purchase of these goods by the person to whom such transfer, delivery of supply is made, [but does not include a mortgage, hypothecation, charge or pledge], and thus it cannot be disputed that activities of processing of grey cloths, and its manufacture as work contract and job charges; including value of chemicals and colours, used in executing the work contract would be correct. Although, the arguments of Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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