9911796707
TMI Blog2015 (10) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... the conduct of the parties disclose in terms of the bid, the assessee supplied the materials as per specifications and paid tax thereon and transferred title in the goods to M/s. KPTCL. Thus, KPTCL became the owner of the said materials. They in turn, handed over the materials for safe custody to the assessee to enable him to perform the said contract, i.e., erection work. As the KPTCL had entered into four contracts, unless these four contracts are performed in unison, the object of given contract would have been frustrated. All the four contracts are given to the same assessee. Therefore, they wanted to ensure that the erection work which is purely a labour work was also to be treated as an integral part of this composite contract on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereinafter referred to as the Act ). During the years 2005-06 to 2007-08, the assessee was engaged in execution of the works awarded by M/s. Karnataka Power Transmission Corporation Limited (for short, hereinafter referred to as KPTCL ) for construction of power lines and erection of transmission towers for certain specified distances in the Districts of Hassan and Mysore. The prescribed authority classified the taxable turnovers and levied tax at four per cent. on certain items and subjected to levy of tax at 12.5 per cent on some goods. As there was some mistakes in the reassessment orders, the same were rectified by the order dated February 27, 2009 passed by the prescribed authority. The Joint Commissioner of Commercial Taxes (Admn.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore the revisional authority was justified in levying tax treating the transaction in question as a works contract under entry 23 of the Sixth Schedule and the Tribunal has erred in treating the case as of sale and levying tax at four per cent. under entry 96 of the Third Schedule and therefore she submits a case for interference is made out. 3. Per contra, learned counsel for the assessee supported the impugned order. 4. In the light of the aforesaid facts and rival contentions, the point that arises for our consideration in these revision petitions is: Whether the contract executed by the assessee for M/s. KPTCL is a divisible contract or indivisible contract notwithstanding the fact, it is treated as a composite contract ? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lared by the assessee is liable to tax at four per cent. in respect of scheduled goods. In respect of unscheduled goods, the tax levied at 12.5 per cent. on supply of the said materials, the title in the case is passed to M/s. KPTCL. Thereafter, in turn handed over the said materials to the assessee for safe custody as the trustee for and on behalf of M/s. KPTCL. The ownership of the materials was always with M/s. KPTCL. The third portion of the contract is the civil portion of the contract, where the assesse was expected to use the material and with the help of labour lay foundation for erecting towers. It was a case of works contracts. The last portion of the contract is erection of the towers. It is purely a labour contract. 8. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated this contract as a works contract and levied tax under entry 23 of the Sixth Schedule. The Tribunal has set aside the said order. 10. A careful reading of the aforesaid para 3.5 makes it clear for convenience of operation and for payment of sales tax on supply portion, it is treated as a contract for supply. Therefore, the intention of the parties is a manifest coupled with the said clause. The other terms and the conduct of the parties disclose in terms of the bid, the assessee supplied the materials as per specifications and paid tax thereon and transferred title in the goods to M/s. KPTCL. Thus, KPTCL became the owner of the said materials. They in turn, handed over the materials for safe custody to the assessee to enable him to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of material taxes have been paid in accordance with law. No tax is payable in respect of contract for supply of labour. In civil works, it is a works contract and tax is levied under Schedule VI, entry 23. In those circumstances, we find that the finding recorded by the Tribunal that it is a divisible contract and the order passed by the revisional authority was erroneous is proper. The Tribunal was justified in setting aside the order of revisional authority and restoring the order passed by the prescribed authority. Therefore, the substantial question of law is answered in favour of the assessee. We do not see any merit in these revision petitions. Accordingly, petitions are dismissed. The taxes collected by the authorities in pursua ..... X X X X Extracts X X X X X X X X Extracts X X X X
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