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TMI Blog2017 (10) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... law, which according to the revisionist arises from the order of the Tribunal. The said question reads thus: "(N) Whether on the facts and in the circumstances of the case Commercial Tax Tribunal was legally justified in deleting the amount of tax on otherwise subsequent sale as provided under section 3b read with Section 6(2) of Central Sales Tax Act and according to the provisions of 9(1) proviso the State of U.P. where the dealer is registered and from where form-C has to be issued, State of U.P. has power to levy tax on such kind of central sale?" The facts on which there appears to be no dispute appear are as under. The respondent-assessee is stated to have been granted a contract for supply of solar panels by the Ministry of Renew ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee to a levy of tax. Sri Agarwal, on the other hand, has submitted that the provisions of Section 9 would clearly have no application since the same deals with the collection of tax in a State in which the movement of goods commenced. In his submission since none of the goods were ever present in the State of U.P., the substantive part of Section 9 itself would have no application. Sri Agrawal has further rested his submission on the findings returned by the Tribunal in Paragraph 11(9), wherein it has proceeded to hold that the transactions had been subjected to tax in the hands of the sub-contractor. In view thereof, it was his submission that the principles enunciated by the Supreme Court in State of Andhra Pradesh And Others V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even the proviso would have no application. The issue which therefore merits consideration is whether the proviso would apply in the facts of the present case. The submission resting on the proviso proceeds on the assumption that a subsequent sale did in fact occur. However, this Court finds itself unable to sustain the said submission for the simple reason that the assessee did not execute a subsequent transfer of property in goods. The purchase of goods was effected by the sub contractors. Merely because the principal contractor received the entire consideration would not be sufficient to hold that there was a subsequent transfer of property in goods. It is in fact, this issue of sub division of the contract and viewing it as divisible o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -contractors of L&T is registered dealer. None of them are unregistered. Under Section 4(7)(a) read with Rule 17(1)(c), quoted above, where VAT dealer awards any part of the contract to a sub-contractor, such sub-contractor shall issue a tax invoice to the contractor for the value of the goods at the time of incorporation in such sub-contract. The tax charged in the tax invoice issued by the sub-contractor shall be accounted by him in his returns. Therefore, the scheme indicates that there is a "deemed sale" by the dealer executing the work, i.e., the sub-contractor. It is only the sub- contractor who effects transfer of property in goods as no goods vests in the respondent company (contractor) so as to be the subject-matter of a retransfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sult in plurality of deemed sales which would be contrary to Article 366(29-A)(b) of the Constitution as held by the impugned judgment of the High Court. Moreover, it may result in double taxation which may make the said 2005 Act vulnerable to challenge as violative of Articles 14, 19 (1)(g) and 265 of the Constitution of India as held by the High Court in its impugned judgment. " (emphasis supplied) As is evident from the principles laid down in the said decision, the Supreme Court has clearly opined that once the contract was given over for execution to sub-contractors, there was no transfer of property in goods by the principal contractor nor would it be permissible to view the subcontracting as involving a re-transfer. It was held that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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