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TMI Blog2009 (11) TMI 849X X X X Extracts X X X X X X X X Extracts X X X X ..... J. All the aforesaid three writ petitions are being disposed of by this composite order since all the writ petitions have stemmed out of same facts and also identical legal question is also involved therein. I have heard Shri V.K. Jindal, learned senior counsel for the petitioners and Shri N. Sailo, learned Additional Advocate-General, Mizoram for the respondents. Petitioner No. 1 is a Government of India Enterprise, having its head office at Shillong in the State of Meghalaya. The petitioner's company is engaged in power generation projects. Accordingly, the Government of Mizoram also engaged petitioner No. 1 to execute a hydro electric project in Kolasib District in the State of Mizoram. The name of the project has been given as Tuirial Hydro Electric Project, represented by the project head as petitioner No. 2. Petitioner No. 1 engaged one M/s. Patel Engineering Ltd., to execute civil/electrical works of the aforesaid power project. Accordingly, petitioner No. 1 entered into a written contract with the said private company. As per the terms of contract and memorandum of understanding, petitioner No. 1 (NEEPCO) would supply construction materials like cement, steel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d private company. As per the terms of contract and memorandum of understanding, petitioner No. 1 (NEEPCO) would supply construction materials like cement, steel, M.S. plates, CGI sheets, HR sheets, etc., and the price of these materials would be deducted from the contractor's bill. As per the aforesaid agreement construction materials were supplied to M/s. Patel Engineering Ltd., without charging any sales tax. However, while importing the materials from outside the State of Mizoram M/s. NEEPCO had paid Central sales tax, but, the respondents have considered the supply of construction materials by M/s. NEEPCO to its contractor as a sale and the Superintendent of Taxes, Kolasib Circle has imposed sales tax and has also imposed penalty and interest for delay in deposit of sales tax. W.P. (C) No. 91 of 2008 relates to assessment of sales tax for the period July 1, 2002 to March 31, 2004, whereby sales tax of Rs. 62,31,168 and penalty of Rs. 11,070 have been assessed. These amounts have already been paid under protest. W.P. (C) No. 92 of 2008 relates to assessment of sales tax, penalty and interest for the quarter ending of June, September and December, 2005. As per the rect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls will be supplied by NEEPCO to the contractor at site for this work as per the issue price indicated below. The details of issue of such materials and other conditions thereof are indicated at clause 48 of Volume I, Part III. (a) Cement 235.00 INR/bag (b) Mild/Tor steel of all sizes 18330.00 INR/MT (c) Structural steel of all sizes 20607.00 INR/MT (d) MS plate of all thickness 25360.00 INR/MT (e) CGI sheet 30684.00 INR/MT (f) HR sheet 23654.00 INR/MT (g) MS angles of all sizes 18202.00 INR/MT (h) Bitumen 12558.00 INR/MT (i) Explosive 48.00 INR/Kg (a) Gelatin (b) Electronic detonator (ED) 16.34 INR/No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll state the engineer-in-charge's objections with reasons. The contractor shall then promptly make good the defect or ensure that the rejected materials or plant comply with the contract. If the engineer-in-charge so requests, the tests of rejected materials or plant shall be made or repeated under the same terms and conditions. All costs incurred by the Corporation by the repetition of the tests shall, after due consultation with the contractor, be determined by the engineer-in-charge and shall be recoverable from the contractor by the Corporation and may be deducted from any monies due or to become due to the contractor and the engineer-in-charge shall notify the contractor accordingly. (iv) Materials rendered surplus on completion of the work or on foreclosure of work or cancellation of the contract shall be returned by the contractor in good condition at Corporation Store at Tuirial Hydro Electric Hydro Power Station Project (TRHEP). Surplus stores and/or materials returned by the contractor will be credited to him at the issue price (appendix VI). In case used materials rendered surplus after the work are to be accepted, the decision of the engineer-incharge in this res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Mizoram submitted that having realised the fact that any transfer of goods to the contractor for its use in the power project may fall within the ambit of the Mizoram Sales Tax Act, M/s. NEEPCO registered itself as a dealer and registration No. 26/KLB/MST was issued to them on November 19, 2002 and now they are making a somersault. The learned Additional Advocate-General also submitted that had M/s. NEEPCO not supplied the building materials the contractor would have purchased the same either from a local dealer or from outside the State and in that eventuality he would have been liable to pay sales tax and, as such, if the petitioners are exempted from paying sales tax, it would be detrimental to the interest of the State. Be that as it may, according to the learned Additional Advocate-General, the issue is no longer res integra since the same has already been decided by the honourable Supreme Court in the case of N.M. Goel Co. v. Sales Tax Officer reported in [1989] 72 STC 368; [1989] 1 SCC 335, which has been followed in the case of Rashtriya Ispat Nigam Ltd. v. State of Andhra Pradesh reported in [1998] 109 STC 425 (SC); [1998] 8 SCC 439. To counter the aforesaid auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred payment or other valuable consideration; (19) 'Sale' with all its grammatical variations and cognate expressions means any person for cash, deferred payment or other valuable consideration, and includes (a) any transfer otherwise than in pursuance of a contract of property in any goods for cash, deferred payment or other valuable consideration; (b) any transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract; (c) any delivery of goods on hire purchase or any system or payment of instalments; (d) any transfer of the right to use any goods for any purpose (whether or not for a specified periods); (e) any supply of goods by an unincorporated association or a body of persons to a member thereof for cash, deferred payment or other valuable consideration; (f) any supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service is for cash, deferred payment or other valuable consideration; Under section 2(10) of the Mizoram Sales Tax Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o difficulty to hold that supply of goods to the contractor by his employer also amounts to sale within the mischief of section 2(19) of the Act. While taking the aforesaid view to declare petitioner No. 1 as dealer and its supply of materials to the contractor as sale within the purview of the Act, I was fortified by the law enunciated by the apex court in the case of N.M. Goel [1989] 72 STC 368; [1989] 1 SCC 335. Hence it is necessary to ascertain whether the facts and circumstances of the case of N.M. Goel [1989] 72 STC 368; [1989] 1 SCC 335 were identical or stood on different footing from the case in hand, it would be apposite to reproduce the terms of the contract in the aforesaid case and the law laid down by the apex court which are as under (at page 376 of 72 STC): 3. The appellant-company is a building contractor at Rajnandgaon in Madhya Pradesh and is registered as a dealer under the Madhya Pradesh General Sales Tax Act. The appellant's tender for construction of foodgrains godown and ancillary buildings at Rajnandgaon was accepted by the Central Public Works Department. It was an item rate tender. In the tender so submitted by the appellant, the prices ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the materials are supplied by the Government within the scheduled time for completion of the work plus 50 per cent. thereof scheduled time plus six months if the time of completion of the work exceeds (12 months) but if a part only of the materials has been supplied within the aforesaid period, then the contractor shall be bound to do so much of the work as may be possible with the materials and stores supplied in the aforesaid period. For the completion of the rest of the work, the contractor shall be entitled to such extension of time as may be determined by the engineer-incharge whose decision in this regard shall be final.' 4.. As mentioned hereinbefore, under the said clause, all materials supplied to the contractor remained the absolute property of the Government and could not be removed on any account from the site of the work and were at all times open to inspection by the engineer-incharge. Any such materials remaining unused and in perfectly good condition at the time of completion or determination of the contract were to be returned to the engineer-in-charge at a place directed by him by a notice in writing in his hand if he so required but the contractor wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... materials are not returned in good condition then the petitioner No. 1 shall be at liberty to recover the value of the materials at double the issue rate. In my considered opinion, in the first case of Rashtriya Ispat Nigam Ltd. [1998] 109 STC 425 (SC); [1998] 8 SCC 439 the honourable Supreme Court was also dealing with an identical issue. In this case, however, the contractor did not have the opportunity to retain the surplus goods, the benefit that was available to the contractor in the N.M. Goel case [1989] 72 STC 368; [1989] 1 SCC 335. However, their Lordships have held that this does not appear to be material difference in the contract agreement. I am also of the view that the crux of both the aforesaid authorities centres around as to whether the transfer of goods/materials by the employer to the contractor would amount to sale and in deciding this issue the condition of return of surplus materials is not a significant factor to take a different view. In other words, I hold that the case in hand is squarely covered by the ratio laid down in N.M. Goel [1989] 72 STC 368; [1989] 1 SCC 335. The judgment of the honourable Supreme Court rendered in the case of State of Andhra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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