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TMI Blog2017 (2) TMI 958X X X X Extracts X X X X X X X X Extracts X X X X ..... . The demand of differential of tax imposed by the department, and affirmed by the tribunal, is in accordance with law, and the challenge laid to it fails - revision dismissed - decided against revisionist. - SALES/TRADE TAX REVISION No. 744 of 2011 - - - Dated:- 9-2-2017 - Hon'ble Ashwani Kumar Mishra, J. For the Applicant : N.C. Gupta For the Opposite Party : C.S.C. ORDER 1. This revision has been filed by the M/s Executive Engineer, Rural Engineering Service, Division Mainpuri, questioning the correctness of the order passed by the tribunal dated 28.6.2011, whereby the assessee has been held liable for payment of differential of tax under section 3G(3) of the U.P. Trade Tax Act. 2. From the materials placed, it appears that a contract was awarded by the assessee in favour of a contractor for raising certain construction, for its benefit. An agreement was entered into between the parties. Schedule 'C' of the contract, which is relevant for present purposes, reads as under:- 3. The assessee purchased cement and other building materials on concessional rates invoking the provisions contained under section 3G(1) of the Act. Such goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned counsel for the parties, and examined the materials placed on record. It is to be noticed that the transaction which has given rise to the controversy involved is not disputed. It is admitted that construction materials were purchased by the government entity for its construction activity upon concessional rates of tax. Such construction materials were made available to the contractor, for being utilized in connection with the construction work to be undertaken for the benefit of government entity. Schedule 'C' to the contract has already been extracted above, according to which, the cement and steel was to be made available at the site, as per the requirement of construction to be made for the government entity, and the amount equivalent to the goods supplied would be adjusted from the dues payable to the contractor. It was also contemplated that in case goods over and above what was required was obtained, then contractor was liable to be penalized. The question that arises for consideration in the facts of the present case thus is as to whether such arrangement, permitting utilization of construction materials by contractor and adjustment of its consideration in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the agreement must be deduced from a review of all the attendant circumstances. But from the mere passing of title to goods either as integral part of or independent of goods, it could not be inferred that the goods were agreed to be sold, and the prices were liable to sales tax. Whether a contract for service or for execution of work involved a taxable sale of goods must be decided on the facts and circumstances of each case. The burden in such a case lay upon the taxing authorities to show that there was a taxable sale, and that burden was not discharged by merely showing that property in the goods which belonged to the party performing service or executing the contract stood transferred to the other party. For the facts stated above I am of the definite view that the ratio laid down in N.M. Goel and Company (supra) is clearly distinguishable from the present case and is wholly inapplicable. Similarly, the view is reiterated in M/s Modi Xerox, Rampur (supra). 8. Learned Standing Counsel on the other hand has heavily relied upon the judgment of the Apex Court in M/s N.M. Goel Co. (supra). Similar question had arisen for consideration in the said decision and the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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-in-charge whose decision in this regard shall be final. 9. The Apex Court in such circumstances examined as to whether transfer of goods to the contractor would amount to sale or not Paragraph 11 of the judgment in M/s N.M. Goel Co. (supra) reads as under:- 11. Therefore, from the above decisions it follows that in order to be sale taxable to duty, not only the property in the goods should pass from the contractor to the Government, or the appellant in this case but there should be an independent contract- separate and distinct- apart from mere passing of the property where a party purchases or procures goods from the Government. Mere passing of property from the contractor to the Government would not suffice. There must be sale of good. The primary object of the bargain judged in its entirely must be viewed. In the instant case, clause (10) is significant as we have set out hereinbefore. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in light of the principles of law laid down by the Apex Court, it is to be observed that in the present case also the goods have been transferred to the contractor and the amount payable for such goods have been adjusted from the account of the contractor. The contract of sale therefore is complete. The provisions of sub-section (2) of Section 3G of the Act therefore gets attracted. The order passed by the assessing authority under sub-section (3) of section 3G of the Act thus cannot be questioned. 12. The other judgment relied upon by learned counsel for the revisionist in The Commissioner, Sales Tax, U.P. vs. S/s U.P. Avas Evam Vikas Parishad, Kanpur (supra), is clearly distinguishable on the facts of the present case inasmuch as the goods obtained on concessional rates were found to have been utilized by the government entity itself and there was no transfer to the contractor of goods, is of no help for the revisionist's cause. 13. The last submission advanced by Sri Gupta that the proceedings are not assessment proceedings, is also an aspect concluded by the Division Bench of this Court in M/s Bharat Pumps and Compressors Ltd. Naini Allahabad (supra), wherein while i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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