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TMI Blog1999 (7) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... d under section 2(t) of the Andhra Pradesh General Sales Tax Act, 1957 or not ? 3.. The brief facts of the case are that the petitioners and the appellants are dealers in cotton, owning cotton pressing factories. During the relevant assessment years, the dealers not only purchased cotton kapas and ginned the same and sold the ginned cotton but also engaged in executing the work of pressing of cotton lint for arranging into bales relating to the cotton brought by the customers. For executing such work the dealers purchased the material like hessian cloth, iron bale-hoops, etc., from outside the State as well as within the State and used such material in executing the work of pressing the cotton into bales and collected the agreed charges i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned counsel that in the process of converting the cotton lint into bales, no new product is coming out and the cotton lint continues to be as such. Therefore, there was no justification in holding that the work carried on by the dealers amounts to works contract. According to the learned counsel this is only a service contract and the material used by the dealers are only incidental to the services rendered by them and as the work carried on by the dealers is not fitting into the definition of works contract as defined under section 2(t) of the Act, hence the disputed turnover is not exigible to tax. The learned counsel also referred to the definition of works contract as referred in section 2(t) and referred to that part which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcial Taxes on the other hand contended that the activity of the dealers clearly amounts to works contract. It was contended that in the process of carrying out the works contract no new article need be produced or manufactured. It was contended that the term fitting out is to be construed supplying synonymous meaning as are applicable to the other terms that are used along with the said term fitting out . If so applied it should be understood that no new article is required to be produced as a result of the work done by the dealers. The learned counsel also contended as rightly held by the Appellate Tribunal the activity of the dealers clearly amounts to fitting out as contained in the definition of section 2(t) of the Act. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onary, means something that improves, especially an addition or alteration that adds to value ; Repair as per Oxford dictionary means restore to good condition after damage or wear . Admittedly the activity of pressing cotton lint and converting the same into bales by using hessian cloths and iron hoops could not be considered as falling under the terms improvement or repair as there is no improvement or repair to the cotton supplied by the customers to the dealers for pressing the same and converting into bales. Then we are left with other term fitting out . The meaning given to it shows to supply things fit and necessary . Here the dealers are supplying hessian cloth and iron hoops while converting the cotton lint into bales after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used by the dealers while executing the work of converting the cotton lint into bales. The dispute is only whether it amounts to works contract or not. This depends upon the interpretation of the term fitting out occurring in section 2(t) of the Act. As we have already noted the meaning of the said term is to supply things fit and necessary . Here admittedly the dealers are supplying the hessian cloth and iron hoops while converting the cotton lint into bales. Therefore, the said term perfectly applies to the activity of the dealers in question. Further the term fitting out is used along with the terms improvement and repair which terms do not mean that the resultant of such activity would give a new article or thing. The term fitti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 9 per cent. On further appeal to the Appellate Tribunal, the Tribunal also upheld that the total polyester film and gum used during the relevant previous year is liable to tax at the rate of 9 per cent on polyester film and 5 per cent on gum. This is contested by the dealers in the present batch of revisions. 14.. The contention of the learned counsel is whether the material used in the works contract is liable to tax treating it as a sale. 15.. As we have already considered this issue in the earlier batch of cases in the above paras the activity of the assessee could not be considered as a mere sale of polyester film and gum. The work satisfies the definition of the works contract as defined under section 2(t) of the Act. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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