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TMI Blog2024 (6) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Act and it is the responsibility of the sub-contractor to include the same in his return. The Apex Court, in the case of LARSEN TOUBRO LIMITED VERSUS ADDITIONAL DEPUTY COMMISSIONER OF COMMERCIAL TAXES ANOTHER [ 2016 (9) TMI 519 - SUPREME COURT] , has considered the pari materia provision under the Karnataka Sales Tax Act, 1957 and concluded that payments made to the sub-contractor are not to be included while calculating the total turnover of the contractor. In view of the authoritative pronouncement of the Apex Court in the case of Larson Toubro Limited , proviso to Section 3-B(2) to the extent and that the turnover of such amounts is included in the return filed by such subcontractor is read down as not to apply to the contractor wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction shall be allowed unless the dealer claiming deduction produces proof that the sub-contractor is a registered dealer liable to pay tax under this Act and that the turnover of such amount is included in the return filed by such sub-contractor. 4. The second clause of the proviso that the turnover of such amounts is included in the return filed by such subcontractor is the subject matter of challenge. 5. Reliance is placed on the judgment of the Apex Court in the case of Larsen Toubro Ltd. v. Additional Deputy Commissioner of Commercial Taxes, reported in (2016) 96 VST 512 (SC) to contend that while calculating the turnover for the purpose of payment of turnover tax, payments made to subcontractor are not be included. In the said cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over, the contractor cannot be absolved of his liability to pay the tax. 9. We have considered the submissions and perused the materials on record. 10. Taxable turnover is defined under Section 2(p) of the Tamil Nadu General Sales Tax Act. Taxable turnover means the turnover on which a dealer shall be liable to pay tax as determined after making such deductions from his total turnover and in such manner as may be prescribed. Section 2(q) defines total turnover to mean the aggregate turnover in all goods of a dealer at all places of business in the State, whether or not the whole or any portion of such turnover is liable to tax. 11. Under Article 366(29A)(b) of the Constitution of India, once the work is assigned by the contractor, the only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount paid is not to be included in the total turnover. The amount paid to the sub-contractor is not for transfer of property in goods. When matter is examined from this angle, the ratio laid down by this court in the Andhra Pradesh judgment clearly applies inasmuch as in that case also the court noticed that section 4(7) of the Andhra Pradesh Act indicated that the taxable event is the transfer of property in goods involved in the execution of a works contract and the said transfer of property in such goods takes place when the goods are incorporated in the works. The court held that the value of the goods which constitutes the measure for the levy of tax is the value of goods at the time of the incorporation of the goods in the works. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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