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TMI Blog2023 (4) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... iled by the State challenging the judgment dated 07.07.2022 partly allowing five appeals of the assessee for the relevant period. 3. The revisions filed by assessee-revisionist being Revision No. 345, 346, 347, 348 and 349 of 2022 were admitted on 14.10.2022 on the following question of law:- "A. Whether on the facts and circumstances of the case the Commercial Tax Tribunal was legally justified in holding that the turnover of the applicant will not have to be assessed as per Section 4(3) of the Value Added Tax Act but at the same time turnover has to be assessed as per Rule 9 of the Value Added tax Rules? B. Whether in the facts and circumstances of the case the Commercial Tax Tribunal was legally justified in holding that the provision of Section 4(3) of the VAT Act will not apply in the case of work contract?" 4. Similarly, in revisions filed by the State, following question of law arises:- "1. Whether on the facts and circumstances of the case, the Commercial Tax Tribunal was legally justified in estimating the value of goods imported out of State amounting to Rs.11,48,85,172/- on the basis of pro-rata basis against the actual import of Rs.8,97,18,323/- provided under R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue was also partly allowed and the benefit granted by the first appellate authority under Section 4(3) was set aside. 9. Hence, these two sets of appeal one by assessee and the other by the Revenue have been filed for all the five assessment years. Revision No. 346 of 2022 is being taken up as the leading case as the question raised in all the connected appeals is one and the same and only difference is of the turnover of sale and the liability of tax. 10. For the assessment year 2014-15, dealer executed work contract for which total payment of Rs.116,43,08,297/- was made to him. For getting the work contract executed, the dealer had made purchase within the State and also brought goods into the State of U.P. He declared purchases made in U.P. at Rs.31,69,22,453/-, while the ex-U.P. purchase was declared at Rs.21,97,71,050/-. The assessing authority granted a rebate of 30% of labour and profit as per Rule 9(3) and found the total value of goods in the execution of the work contract at Rs.81,50,15,807/-. The claim of Rs.21,97,71,050/- of the ex-U.P. purchase was not given as claimed under Section 3, 4, 5 of the Central Sales Tax Act read with Rule 9(1)(e). 11. Against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9(3)- Where accounts maintained by the contractor do not show separately the value of labour and services and amount of profit accrued on such labour and services, or accounts maintained by the dealer are not worthy of credence or if the dealer has not maintained accounts, for the purpose of determining turnover of goods in which transfer of property in goods has taken place, in cases other than those mentioned in the table below, an amount, representing twenty percent of gross amount received or receivable, shall be deducted towards labour and services and amount of profit accrued thereon and in the cases described or mentioned in column 2 of the table given below, amount of deduction towards such labour and services and amount of profit accrued thereon shall be computed at the rate percentages, given in column 3 against the entry in column 2 of the table, of the amount received or receivable. SI. No. Description of works contracts Rate 1 2 3 1. Fabrication and installation of plant and machinery 10% 2. Fabrication and erection of structural works including fabrication, supply and erection of iron trusses, purline. 10% 3. Fabrication and installation of cranes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here such sale is affected by way of transfer of property in goods, the amounts specified in the Sub-clause provided in Sub-Rule (1) of Rule (9) shall be deducted if included in the gross amount received or receivable in respect of works contract. 16. Clause (e) of Sub-Rule (1) of Rule (9) provides for the deduction of all amounts representing the value of goods in which property has been transferred in the execution of works contract as a result of sale in the course of inter-State trade or commerce. Thus, all the goods brought by a dealer used in the works contract through ex-U.P. purchase has to be deducted from the gross amount received. 17. Rule 9(3) provides for deducting the value of labour and service and amount of profit from the accounts maintained by the contractor which do not show separately the same, and through this rule the Legislature has provided a deduction of 30% from such amount received or receivable. 18. The dealer before this Court who is a civil contractor and admittedly he received an amount of Rs.116,43,08,297/- for the assessment year 2014-15 for the contract executed by him. The said amount not only included the labour and service charge, profit but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tract. The said amount has to be deducted if included in the gross amount received or receivable in respect of works contract. 23. The transactions of the dealer of bringing the goods from outside the U.P. are covered under Section 3, 4, 5 of the Central Sales Tax Act, 1956 read with Rule 9(1)(e) of the Rules. 24. In M/s. Comfort Systems vs. Commissioner Commercial Tax, U.P., Sales/Trade Tax Revision No. - 346 of 2018, decided on 01.02.2019, this Court had also taken a view that, "as a result of sale in the course of inter-state trade or commerce" appearing in Rule 9(1)(e) of the Rules has to be read to include in its cover all transactions covered under section 3 of the Central Sales Tax Act, 1956. Thus, from the conjoint reading of Section 4 of the VAT Act, Rule 8 and 9 of the Rules, it is clear that Section 4 being the charging section and the only section under the VAT Act which prescribes levy of tax on turnover of sales. 25. Moreover, Sub-Section (3) of Section (4) prescribes the formula for computation of tax payable by dealer on the turnover of sale. While Rule 8 prescribes for the determination of taxable turnover of sales and Sub- Rule (ix) of Rule 8 prescribes for amo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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