Works contract sales tax levy remains valid despite absence of prior parliamentary specification and later procedural rules.

A State may validly levy sales tax on transfer of property in goods involved in works contracts after the constitutional amendment, and Article 286(3)(b) does not make prior parliamentary specification a condition precedent to the levy's validity. The State's competence under Entry 54 of List II remains effective unless and until Parliament imposes inconsistent conditions. The statutory liability also arises even if later-amended rules on turnover computation, registration and returns are not yet in force, where the Act itself supplies the charging framework and an ascertainable measure of turnover. The levy on works contract turnover was therefore upheld.

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Issues: (i) Whether the levy of sales tax on transfer of property in goods used in execution of works contracts was unconstitutional for want of parliamentary specification under Article 286(3)(b); and (ii) whether tax could be levied before the amended rules governing computation of turnover, registration and returns came into force.

Issue (i): Whether the levy of sales tax on transfer of property in goods used in execution of works contracts was unconstitutional for want of parliamentary specification under Article 286(3)(b).

Analysis: The amendment enlarging the definition of sale to include works contracts was treated as valid in light of Article 366(29A) and the State's competence under Entry 54 of List II. Article 286(3)(b) was read as enabling Parliament to impose conditions, restrictions and incidents, but not as making such parliamentary action a condition precedent to the validity of State legislation. The absence of a parliamentary law specifying conditions did not disable the State from enacting the levy; any future parliamentary specification would only control the extent of inconsistency, if any, in the State law.

Conclusion: The challenge to the constitutional validity of the levy failed and the issue was decided against the assessee.

Issue (ii): Whether tax could be levied before the amended rules governing computation of turnover, registration and returns came into force.

Analysis: The amended definitions in the Act itself supplied the taxable person, taxable event and turnover base, and the measure of turnover could be ascertained from the assessee's accounts, information furnished, or assessment. The later rule amendments only streamlined procedure and did not create the liability. Section 5 of the Act was not incomplete merely because the detailed procedural rules were amended later, and the absence of those amendments did not postpone the statutory liability to pay tax on works contract turnover.

Conclusion: The contention that no tax could be levied before the amended rules came into force was rejected and the issue was decided against the assessee.

Final Conclusion: The levy on works contract turnover was upheld, and the writ petitions were dismissed because neither the constitutional nor the procedural challenge was accepted.

Ratio Decidendi: A State can validly levy tax on works contract turnover after the constitutional amendment, and the statutory liability is not suspended merely because detailed parliamentary conditions or later procedural rules have not yet been made, so long as the Act itself contains the charging framework and ascertainable measure of tax.

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