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of <h1>Kerala Sales Tax Act: Construction Firm's Challenge Dismissed</h1> The court upheld the constitutionality of item (c) in Explanation (4) for the definition of 'sale' under the Kerala General Sales Tax Act, 1963, ... - Issues:1. Declaration of item (c) in Explanation (4) for the definition of 'sale' under the Kerala General Sales Tax Act, 1963 as unreasonable, beyond legislative competence, and unconstitutional.2. Determination of whether the nature of the transaction carried out by the petitioner is a works contract or not.Analysis:Issue 1:The petitioner, a partnership-firm engaged in construction/erection of fire protection systems, challenged the constitutionality of item (c) in Explanation (4) for the definition of 'sale' under the Kerala General Sales Tax Act, 1963. The petitioner contended that the State had levied tax on inter-State sales, which they argued was unconstitutional. The court referenced previous judgments upholding similar provisions in other states and the Supreme Court's interpretation of the relevant legal concepts. The court held that the explanation in question fixed the situs for deemed sales resulting from the transfer of property in goods involved in works contracts, and it did not impact sales in the course of inter-State trade or commerce. Therefore, the court dismissed the challenge to the constitutionality of the provision.Issue 2:The court noted that the issue regarding works contracts had been previously settled by relevant decisions. The petitioner's argument that a Division Bench order was relevant to their case was dismissed as not connected to the Full Bench decision. The court cited precedents establishing that the transfer of property in goods involved in the execution of works contracts shall be deemed a sale. The court analyzed the facts of the case, where the petitioner executed works contracts in Kerala, and found that the appropriation of goods took place in Kerala, making the transactions liable to tax under the Kerala General Sales Tax Act. The court concluded that the petitioner was liable for the works contract based on the factual position, leading to the dismissal of the petition.In conclusion, the court dismissed the original petition, finding no grounds to grant the relief sought by the petitioner.
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