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TMI Blog2011 (4) TMI 1246X X X X Extracts X X X X X X X X Extracts X X X X ..... s used to execute the contract. Therefore, the intention of the Legislature is very clear, unambiguous and it does not require any interpretation at all. In that view of the matter, the order passed by the revisional authority is patently erroneous, contrary to the statutory provisions and cannot be substained. Therefore the substantial questions of law is answered in favour of the assessee and against the Revenue. Appeals are allowed. - Tax Appeal Nos.7-9 of 2009 - - - Dated:- 7-4-2011 - KUMAR N. AND RAVI MALIMATH, JJ. For the Appellants : T.M. Keshava Murthy For the Respondent : Smt. Sujatha, Government Advocate, The benefit of composition of tax under section 17(6) of the Karnataka Sales Tax Act, 1957 is subject to the condition, inter alia, in sub-section (7) of section 17 which provides that the benefit of section 17(6) is not available to a dealer, who purchases or receives goods from outside the State for the purpose of using such goods in the execution of works contract. In other words, the benefit is confined to a dealer, who purchases or receives goods within the State. As is clear from sub-section (7) of section 17, there is no further requirement th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03-04 and 2004-05 and as far as Udayashankar is concerned, it is 2003-04. As common questions of law are involved in all these three appeals, they are taken up for consideration together and disposed of by this common order. The assessees are dealers registered under the provisions of the Karnataka Sales Tax Act, 1957. They are engaged in the execution of works contract of asphalting of roads. They opted for composition assessment as provided under section 17(6) of the Act and filed the prescribed application in form No. 8AA before the assessing authority. The assessing authority concluded non-scrutiny assessment under section 12C of the Act, levied composition tax at four per cent as provided under section 17(6) of the Act. Subsequently, the assessees filed a rectification application under section 25A of the Act, contending that they have purchased goods from outside the State for the purpose of using such goods in the execution of works contract and therefore, in terms of section 17(7) of the Act, they are not eligible for composition assessment under section 17(6) of the Act. Therefore, they wanted reassessment under section 5B read with section 12 of the Act. However, the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is no evidence on record to establish that these goods are actually used in the execution of civil works contracts and they have been effected as deemed sales by way of transfer of property in goods during the execution of works. According to the revisional authority, only the goods that are used in the execution of works contracts resulting in transfer of property in goods are barred from purchase from outside the State or its receipt in the similar way from outside the State and not otherwise. The inter-State purchases of goods in the instant case are purportedly the spare parts and accessories of road equipment, which cannot be used in the execution of civil work contracts resulting in transfer of property in goods. Therefore, he held that the appellate authority committed a mistake in reversing the assessment order and therefore, he set aside the order of the appellate authority and restored the order passed by the assessing authority. Aggrieved by the said order, the assessees are in appeal. These appeals are admitted to consider the following substantial questions of law: (i) Whether, in the facts and circumstances of the case, the respondent is legally justified in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount under clause (i) and, on being so permitted, he shall pay tax in advance as provide for under section 12B and all the provisions of section 12B mutatis mutandis shall apply to this subsection; (iii) the amount paid under clause (ii), shall be subject to such adjustment as may be necessary on completion of final assessment. Section 17(7) of the Act reads as under: (7) Nothing contained in sub-section (6) shall apply to a dealer who purchases or receives goods from outside the State for the purpose of using such goods in the execution of works contract. Section 5B of the Act is the charging section insofar as the works contracts are concerned, which reads as under: 5B. Levy of tax on transfer of property in goods (whether as goods or in some other form) involved in the execution of works contracts. Notwithstanding anything contained in sub-section (1) or subsection (3) or sub-section (3C) of section 5, but subject to sub-sections (4), (5) or (6) of the said section, every dealer shall pay for each year, a tax under this Act on his taxable turnover of transfer of property in goods (whether as goods or in some other form) involved in the execution of wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ords, which the Legislature has not used in the said section. To attract section 17(7), all that the assessee has to show firstly is that, he has purchased or received goods from outside the State and the said goods is used in the execution of the works contract. It is not the requirement of law that in the course of using such goods, the title to the goods should be transferred to the customer. In the nature of things, when machinery is purchased or received from outside the State for the purpose of using them in the execution of the works contract, neither title in the machinery will pass on to the customer nor that machinery will be used as raw material in the works to be carried out. It is a tool which is used to execute the contract. Therefore, the intention of the Legislature is very clear, unambiguous and it does not require any interpretation at all. In that view of the matter, the order passed by the revisional authority is patently erroneous, contrary to the statutory provisions and cannot be substained. Therefore the substantial questions of law is answered in favour of the assessee and against the Revenue. Hence, we pass the following: ORDER Appeals are allowed. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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