9911796707
TMI Blog2008 (11) TMI 643X X X X Extracts X X X X X X X X Extracts X X X X ..... opriate agreements. The moot question in this application is whether the petitioner is liable to the assessment orders for the period of November 28, 1980 to March 31, 1981 and also April 1, 1981 to March 31, 1982 imposing purchase tax under section 6C of the Bengal Finance (Sales Tax) Act, 1941 (hereinafter referred to as, the 1941 Act ) on the materials supplied by the Government Departments and used and utilized by the petitioner in execution of the works contracts. Mr. Roy Chowdhury, the learned senior counsel, appearing on behalf of the petitioner, has strenuously urged before us that the petitioner is not liable to pay tax under section 6C of the Bengal Finance (Sales Tax) Act as has been specifically stated under clause 10 of the agreement/works contract, the petitioner was only to get the benefit of supplied goods from the Government and to carry out the construction work as specifically stated in the agreement in question. It is to be noted that the constitutional validity of levy of purchase tax under section 6C of the 1941 Act was questioned before this Tribunal and the Full Bench of the Tribunal in a decision in Nepal Chandra Banerjee v. State of West Bengal r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im 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. The learned Tribunal also in his decision duly analysed the said clause 10 and summarized the features of clause 10 as follows: (i) Goods/stores were being supplied for specific purpose for consideration of payment of price. The price was to be paid but payment was deferred to the time of finalization of respective dues. (ii) The goods/materials supplied were ascertained goods and to be appropriated by the contractor for execution of the specified work. The contractor could not use any part of those materials for any other work or purpose. (iii) The contractor had no right to remove those goods from the site of the work. (iv) All such materials supplied by the Department would remain the absolute property of Government so long as those were not utilized in the concerned construction. (v) Unused materials if in good condition after completion of the work were to be returned to the Government if the engineer-in-charge in writing asked for such return. (vi) The full value of the utilized quantity of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the decision which was also placed before us N.M. Goel Co. v. Sales Tax Officer, Rajnandgaon reported in [1989] 72 STC 368 (SC); [1989] 1 SCC 335 where it appears that the honourable Supreme Court answered the question which is as follows (at page 378 of STC): . . . The question, therefore, was whether there was sale of iron, steel and cement by the PWD while supplying those materials for the construction work undertaken by the appellant. If supply of these materials is sale within the meaning of section 2(n) of the M.P. General Sales Tax Act then the appellant would be liable for payment of entry tax as it has been assessed. The question, therefore, is whether there was sale and whether the property in the goods in question passed to the appellant or continued to remain with the PWD although the PWD had in the final bill debited the prices of the goods so supplied to the appellant under clause (10) of the contract. The Full Bench found that there was sale and as a result of that the duty was leviable. The question, therefore, is whether there was sale of goods in view of the contract between the parties whereunder the custody and control of the goods remained with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat a sale within the meaning of section 2(g) of the 1941 Act, namely, a transfer of property in goods supplied by the owner/contractee to the contractor for use in the execution of a works contract takes place in the cases under our consideration, when such goods are actually used in the construction work provided prices of such goods are deducted from or adjusted against bills or dues of the contractor. We further hold that there is no such sale or transfer of property in goods supplied, when such goods are supplied to the contractor free of cost, that is to say, without deduction or adjustment of the prices thereof from the bills or dues of the contractor. We have arrived at this conclusion on the basis that payment of price by whatever name it is called is the clinching factor. Such prices are amounts received or receivable as valuable consideration as contemplated in Explanation 1 to section 6D of the 1941 Act. Had the contractor purchased such goods from other sources or otherwise acquired the same for consideration, property therein would naturally vest in him. Similarly, obtaining such supplies from the owner/contractee on payment of price, whether pre-fixed or post-fixed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods in view of the contract between the parties whereunder the custody and control of the goods remained with the PWD and goods were only used in the construction under the contract, this court held that 'in the instant case, by use or consumption of materials in the work of construction, there was passing of the property in the goods to the assessee from the PWD. By appropriation and by the agreement, there was a sale as envisaged in terms of clause (10) set out hereinbefore. Therefore, in our opinion, there was a sale which was liable to tax'. Though this case was sought to be distinguished before the Tribunal by contending that ratio must be treated as one given per incuriam it was rightly rejected by the Tribunal. We are, therefore, in agreement with the conclusion reached by the Tribunal that 'having considered all aspects of the matter, we hold that a sale within the meaning of section 2(g) of the 1941 Act, namely, a transfer of property in goods supplied by the owner/contractee to the contractor for use in the execution of a works contract takes place in the cases under our consideration, when such goods are actually used in the construction work provided pri ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
