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TMI Blog2019 (7) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... e revenue in the case of M/S COMFORT SYSTEMS VERSUS COMMISSIONER COMMERCIAL TAX, U.P. [ 2019 (2) TMI 924 - ALLAHABAD HIGH COURT] . Second submission advanced by learned Standing Counsel is concerned, clearly both appellate authorities have considered the material that was brought before them, and have thereafter concluded that there is no dispute to the fact that the assessee imported the goods against express and implied contracts and applied the same to the works contract pursuant to which it had made the import of goods. No material has been brought before this Court to doubt the correctness of that finding. Therefore, that submission advanced by learned Standing Counsel also cannot be accepted. The concept of subsequent sale was not rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were legally justified in deleting the amount of tax assessed by the assessing authority in view of the composition of scheme dated 11.2.05 and section 7D specifically prescribed that 'notwithstanding anything contained in this act, but subject to the direction of the State Government..............?" 3. The present revision has been filed by the revenue against the judgment and order of the Commercial Tax Tribunal, Bench 3 Kanpur (Jhansi) dated 23.01.2019 by which the said Tribunal has rejected the second appeal filed by the revenue against the order of the First Appellate Authority in Appeal No.403 of 2017 for Assessment Year 2008-09. Thus, the Tribunal has affirmed the order passed by the First Appellate Authority. 4. In short ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on those goods. Accordingly, assuming profit of 20% derived by the assessee on the aforesaid value of goods, the Assessing Officer subjected to assessee to tax on a deemed sale of ₹ 24,73,74,318/-. 6. The assessee on its part contended that there being no dispute that it had imported the entire value of goods only for the purposes of execution of individual civil contract and that it had actually applied those goods for execution of that contract, by virtue of law contained in Sections 3, 4 and 5 of the Central Act as has been explained in the case of Gannon Dunkerley & Co. & Others Vs State of Rajasthan & Others (1993) 1 SCC 364 (hereinafter referred to as the 'Gannon Dunkerley'). The State authorities could never subject s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n examined by the authorities with reference to the contract whether the goods that were imported had actually being applied by the assessee to the civil works contract executed by it for which it had been admitted to the benefits of compound. 9. Sri Rahul Agarwal, learned counsel for the assessee, on the other hand would submit, that the first submission advanced by learned counsel for the revenue, has been decided in favour of the assessee by this Court in Comfort Systems Vs Commissioner, Commercial Tax, U.P., Lucknow (2019) 39 VLJ 176. Insofar as the second submission is concerned, he would submit that the concurrent findings had been recorded by the appellate authorities that there is no dispute on fact that the goods imported by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Supreme Court in Gannon Dunkerley (supra), the same was repelled and it was held as below: "19. That being the governing principle, the language of Rule 9(1)(e) of the Rules relied upon by the learned Standing Counsel has to be examined in that light. In absence of any legislative competence on part of the State legislature to impose tax on deemed sale in the course of inter-state trade, the phrase "as a result of sale in the course of inter-state trade or commerce" appearing in Rule 9(1)(e) of the Rules cannot be restricted or confined to inter-state sale but as referring to transaction of "a sale or purchase of goods" falling under section 3 of the Central Sales Tax Act, 1956. 20. If that Rule were to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, the deemed sale of goods arose, only by way of inter-state sale as the movement of goods was occasioned by the prior contract of sale, namely the works contract. 22. Rule 9(1)(e), though worded differently from section 3- F(2)(i) of U.P.Trade Tax Act, 1948, it does not and it cannot be permitted to convey a different meaning, in view of the binding principle laid down by the Supreme Court in the case of Gannon Dunkerley-II. Also, in absence of legislative intent to exclude the applicability of that Rule to some cases of inter-state sale (such as the present case), would be to allow such interpretation of the law to arise in conflict with the law laid down in Gannon Dunkerley-II. Therefore, the phrase - "as a result of sale in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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