Inter-State goods used in a works contract can qualify for deduction when the Tribunal's factual finding is reasoned and supported by record.

Goods moved from another State and specifically earmarked for execution of a works contract were treated as eligible for deduction under Section 3-B(2)(a) of the Tamil Nadu General Sales Tax Act, 1959. The Tribunal's reasoned factual finding, based on the documentary record and the accepted inter-State movement of the goods, was held not to warrant interference in revision absent demonstrated legal error, perversity, or defective verification. On that basis, the deduction was upheld and revision failed.

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Issues: Whether goods moved from another State and used in execution of a works contract were entitled to deduction under Section 3-B(2)(a) of the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The Tribunal had examined the documentary record produced with the return and recorded a factual finding that the movement of goods from outside Tamil Nadu was specifically linked to the identified works order and was intended for execution of the works contract at the project site. The Tribunal also noted that the assessing authority had accepted the inter-State movement of the goods and that no specific instance of misfeasance or defective verification had been demonstrated to displace the Tribunal's appreciation of the evidence. In revision, interference was unwarranted because the conclusion rested on a detailed factual appraisal within the Tribunal's jurisdiction under Section 36 of the Act.

Conclusion: The deduction under Section 3-B(2)(a) was rightly allowed and the assessee succeeded on the issue.

Final Conclusion: The revision failed as the Tribunal's factual conclusion on eligibility for deduction was not shown to suffer from any legal infirmity warranting interference.

Ratio Decidendi: Where the Tribunal records a reasoned factual finding, based on the material placed before it, that goods moved in inter-State trade were specifically earmarked for execution of a works contract, the deduction contemplated by Section 3-B(2)(a) cannot be denied in revision absent a demonstrated legal error or perversity.

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