Works contract definition construed narrowly: tube-well drilling on labour basis falls outside the statutory scope.

The expression "works contract" in section 2(m) of the Entry Tax Act was construed strictly and confined to contracts for construction or installation expressly covered by the provision, such as buildings, dams, bridges, factories, machinery or fittings. Drilling of tube wells on labour basis was held to have drilling as its dominant object and not to amount to construction of works or installation within the statutory language. Because the legislature had not specifically included tube-well drilling, the activity could not be brought within the definition by implication. The issue was therefore decided in favour of the assessee.

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Issues: Whether drilling of tube wells on labour basis falls within the definition of "works contract" under section 2(m) of the Entry Tax Act.

Analysis: The expression "works contracts" in section 2(m) is confined to contracts relating to construction of works such as buildings, dams and bridges, other immovable property, erection of factories, and installation of machinery and fittings or installations to movable or immovable property where goods are consumed or used but not sold. The decisive element is construction or installation of the kind specifically contemplated by the provision. Drilling of tube wells on labour basis is a contract whose dominant object is drilling, and it is not shown to be construction of works or installation of machinery or fittings within the statutory language. The provision was read literally, and since the legislature had not specifically included drilling of tube wells, the activity could not be brought within the definition by implication.

Conclusion: Drilling of tube wells on labour basis does not fall within "works contract" under section 2(m), and the issue is decided in favour of the assessee.

Ratio Decidendi: A taxing definition must be applied according to its plain language, and an activity cannot be treated as a "works contract" unless it squarely falls within the construction or installation categories expressly covered by the statute.

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