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TMI Blog2011 (8) TMI 995X X X X Extracts X X X X X X X X Extracts X X X X ..... inition under article 366(29A)(b). Appeal dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court in case of Sundaram Industries Limited v. Commercial Tax Officer reported in [2002] 128 STC 358 (Mad). The learned counsel for the assessee further contended that in case of 20th Century Finance Corpn. Ltd. v. State of Maharashtra reported in [2000] 119 STC 182 (SC); [2000] 16 NTN 425, the power of the State to levy tax on transfer of right to use goods would arise only when (a) the contract of transfer of right to use has been executed outside the State, (b) sale has taken place in the course of inter-State trade and (c) sales are in the course of export or import in the territory of India. He submits that the State is not competent to levy tax on the transfer of right to use goods which is deemed sale only if such sale takes place outside the State. Lastly, it has been submitted that the State cannot levy tax on "deemed sale" in view of article 286 of the Constitution. The transactions covered by sections 3, 4 and 5 of the Central Sales Tax Act cannot be taxed by the State authorities. Reference has also been made to the judgment in the case of Tata Elxsi Limited v. State of Uttaranchal [2004] 134 STC 403 (Uttara); [2004] 24 NTN 16. Shri B.K. Pandey in reply h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the judgment in the case of Tata Elxsi Limited v. State of Uttaranchal [2004] 134 STC 403 (Uttara); [2004] 24 NTN 16 and 20th Century Finance Corpn. Ltd. [2000] 119 STC 182 (SC); [2000] 16 NTN 425 he states that the same have no application in the controversy at hand. I have heard counsel for the parties and have examined the records. Short controversy in the present revision for consideration before the court is as to whether the total value of the goods used in the execution of the works contract entered into between assessee, Delhi Development Authority or with National Building Construction Corporation could be treated to be a divisible part of the works contract so as to be subjected to levy of Central sales tax in view of the amendment introduced by addition of sub-clause (b) to clause (29A) of article 366 of the Constitution of India. The Supreme Court in paragraphs 34, 35, 36, 37 and 38 has examined the impact of such amendment introduced in the Constitution of India and has gone to hold that because of legal fiction so introduced under the aforesaid clause on being carried to its logical end would mean that a single works contract stands divided into two parts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pply of labour and services. 37. For the reasons aforesaid, we are of the view that even in the absence of any amendment having been made in the Central Sales Tax Act (after the Forty-sixth Amendment) expressly including transfers of property in goods involved in the execution of a works contract, the provisions contained in sections 3, 4 and 5 would be applicable to such transfers and the legislative power of the State to impose tax on such transfers under entry 54 of the State List will have to be exercised keeping in view the provisions contained in sections 3, 4 and 5 of the Central Sales Tax Act. For the same reasons sections 14 and 15 of the Central Sales Tax Act would also be applicable to the deemed sales resulting from transfer of property in goods involved in the execution of a works contract and the legislative power under entry 54 in State List will have to be exercised subject to the restrictions and conditions prescribed in the said provisions in respect of goods that have been declared to be of special importance in inter-State trade or commerce. 38. Since the question of levy of inter-State sales tax under section 6 of the Central Sales Tax Act is not in issue in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. This court finds no error in the order of the Tribunal so as to warrant any interference in exercise of revisional jurisdiction. The judgment in the case of Jindal Irrigation Limited [2010] 28 VST 126 (All); [2008] UPTC 1258, has not taken note of the relevant paragraph of judgment of the Constitution Bench of the Supreme Court in the case of Gannon Dunkerley & Co. [1993] 88 STC 204 (SC); [1993] UPTC 416 as noticed above. Paragraphs 41 to 44 of the said judgment of Gannon Dunkerley & Co. [1993] 88 STC 204 (SC); [1993] UPTC 416 as reproduced and relied on by the single judge in this case of Jindal Irrigation Limited [2010] 28 VST 126 (All);[2008] UPTC 1258 have no application with regard to controversy in hand. For ready reference: Paragraphs 41 to 44 of the judgment in the case of Gannon Dunkerley & Co. [1993] 88 STC 204 (SC); [1993] UPTC 416 are quoted below (pages 231 and 232 in 88 STC): "41. It must, therefore, be held that while enacting a law imposing a tax on sale or purchase of goods under entry 54 of the State List read with sub-clause (b) of clause (29A) of article 366 of the Constitution, it is not permissible for the State Legislature to make a law imposing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the situs may be in one State or another. It does not involve any contradiction in saying that an inter-State sale or purchase is inside a State or outside it.' (page 321 of STC; 1086 of SCR). 44. The location of the situs of the sale in sales tax legislation of the State would, therefore, have no bearing on the chargeability of tax on sales in the course of inter-State trade or commerce since they fall outside the field of legislative competence of the State Legislatures and will have to be excluded while assessing the tax liability under the State legislation. The same is true of sales which are outside the State and sales in the course of import and export. The State Legislature cannot so frame its law as to convert an outside sale or a sale in the course of import and export into a sale inside the State. The question whether a sale is an outside sale or a sale inside the State or whether it is a sale in the course of import or export will have to be determined in accordance with the principles contained in sections 4 and 5 of the Central Sales Tax Act and the State Legislature while enacting the sales tax legislation for the State cannot make a departure from those princi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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