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TMI Blog2009 (6) TMI 950X X X X Extracts X X X X X X X X Extracts X X X X ..... elied upon by the appellant cannot be accepted as a material fact and it will not have any sanctity as against the original agreement or the tender contract as entered into between the railway authority and the assessee. The Joint Commissioner III (SMR) of Commercial Taxes, had given a specific finding that it is an undisputed fact that jelly was supplied for carrying out various types of works whether it is renewal of track or track sleeper renewal. Apart from that, he has also given a finding that the extracts taken from Southern Railway had clearly indicated that the dealer had supplied jelly worth ₹ 2,24,518 to the Railway Department during the relevant year and that the assessee sold condemned articles for ₹ 7,000. Such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate authority taking into consideration the letter issued by the Divisional Railway Manager dated October 19, 1994 in letter No. T/W.148/ Genl/WA II concluded that the contract which was allotted to the assessee is not one which included supply of materials, but only is of works contract. They heavily relied upon one letter issued by the railway authorities much belatedly after the contract period, namely, in the year 1994. Based on this letter, the first appellate authority has set aside the order of the assessing authority cancelling both the tax liability as well the penalty. The Department, pursuant to the order of the first appellate authority suo motu called for explanation and sent a show-cause notice to the assessee contempla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abovesaid work was purely related to dumping work, (i.e.), labour work. Hence the question of reimbursement of sales tax does not arise in this case. The collection of stone ballast was not contemplated on the above agreement for the year 1985-86. The agreement mentioned in your letter cited above is not correct. This should be correctly read as TPJ 72/84, instead of TPJ 572/84. The only contention raised by him was that when a Governmental organisation, namely, railway would categorically indicate by virtue of this letter that there was no supply involved and what was the work awarded was only the labour contract, the finding of the suo motu enquiry is not legally sustainable. At this juncture, the original agreement between t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tre in quantity should be submitted along with the tender as sample to show the quality for the approval of the engineer before accepting tender. The samples should be sent in three sealed glass jars from each depot. which would clearly indicate and stipulate that the contractor is bound to supply materials and he was expected to show or produce the quality of material to be supplied by giving any specific quantity before the tender. The next clause is clause 23, which reads as follows: The tenderer has to make his own arrangements for obtaining ballast from outside the Railway limits and necessary seignorage wages, etc., if any will be borne by him. The ballast shall be erected on railway land as directed by the engineer's r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has purchased jelly to the tune of Rs. 36,200. If the contract is only for a works contract, there will be no necessity for the assessee to purchase jelly. This will also clearly indicate that the purchase of jelly was made for the purpose of supplying it to the railways and thereafter to complete the work. These three factual aspects coupled with the agreement entered into by the assessee clearly would indicate that the nature of contract is nothing but supply of material also. Therefore, the reliance placed by the first appellate court and the appellant herein on the letter issued by the railway authorities much belatedly in respect of the contract that it would only denote the works contract cannot be accepted and this has b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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