9911796707
TMI Blog2003 (9) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... o the State Government. The Assistant Commissioner, Commercial Taxes Department, Deoghar Circle, Deoghar, subsequently assessed the tax in the execution of "works contract" for the periods 1990-91, 1991-92 and 1992-93 and asked the petitioner to pay it. These orders issued by the Assistant Commissioner, Commercial Taxes Department, Deoghar Circle, Deoghar for three financial years have been challenged by the petitioner in three separate writ petitions. 2.. Counsel for the petitioner made following submission to challenge the orders and in support of petitioner's claim: (1) Transfer of property in goods is an essential ingredient for constituting "sale", in absence of which, a transaction cannot be deemed to be a "sale" and no sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods supplied to it for using the same in the works contract, specially because the petitioner (contractor) never became the owner of those goods as those goods were never transferred. (6) Admittedly, the Government department has purchased iron, steel and cement material under section 13(1)(g) of the Bihar Finance Act, 1981 on payment of concessional sales tax for the purpose of Government use, as such the department cannot sell those materials. (7) Iron, steel and cement being taxable at one point of time, at the time of first sale, under the provisions of the Bihar Finance Act, 1981, the Government department being the first purchaser and the department paid sales tax under section 13(1)(g) of the Act, 1981. Therefore, those mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns in Schedule II. ............. (42) Sales tax: The rates quoted by the contractor shall be inclusive of 4 per cent sales tax which will be deducted from the bills. In case of any increase in sales tax during the period of contract, it will be paid by the department. The increase in sales tax will be allowed extra but deducted from the bills, contractor will not claim any refund on account of sales tax deducted from the bills. If, however, any refund is allowed after final assessment of the returns submitted by the contractor the same shall be credited to Government account." At Chapter IV of the agreement, special conditions for supply of portland cement (clause-4.13.1) and iron and steel (clause 4.13.2) were also made: "4.13.1. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the supply of labour and services, sales tax was leviable on the goods which were agreed to be sold under the first part. But sales tax could not be levied when the contract in question was a single and indivisible works contract. After the 46th Amendment the works contract which was an indivisible one is by a legal fiction altered into a contract which is divisible into one for sale of goods and the other for supply of labour and services. After the 46th Amendment, it has become possible for the States to levy sales tax on the value of goods involved in a works contract in the same way in which the sales tax was leviable on the price of the goods and materials supplied in a building contract which had been entered into in two distinct and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to pay the sales tax ordinarily when the goods or materials are so used in the construction of the building and it is not necessary to wait till the final bill is prepared for the entire work." 6.. In all the cases in hand, the levy of sales tax relates to periods subsequent to 46th Amendment, after insertion of clause (29A) of the article 366 of the Constitution of India. The relevant clause of agreement, as quoted above shows that the State Government supplied Portland cement and iron and steel to the petitioner for which it paid the consideration amount. In this background, after execution of works and transfer of property in goods involved in execution of works, there being deemed transfer of cement and iron and steel on handing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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