Sales tax cannot be deducted from pure labour payments where no transfer of property in goods occurs.

Sales tax under the Punjab General Sales Tax Act was confined to transfer of property in goods, including deemed sales in a works contract. Section 10-C authorised deduction only from sums payable for such transfer in pursuance of a works contract; a mere supply of labour remained a service and did not attract the charging provision. Because no goods, materials, or articles were transferred, the statutory condition for levy and source deduction was absent. Administrative instructions could not expand the scope of the tax or justify deduction from labour bills, so sales tax was not leviable and deduction was unauthorized.

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Issues: Whether sales tax could be levied and deducted from payments made for supply of labour, including under section 10-C of the Punjab General Sales Tax Act, 1948.

Analysis: The statutory scheme taxes the transfer of property in goods, including deemed sales in a works contract, and section 10-C authorises deduction only from sums payable towards such transfer in pursuance of a works contract. A mere supply of labour is a service and does not involve transfer of property in goods. Since no goods, materials, or articles were transferred, the statutory condition for levy and deduction was absent. Administrative instructions could not enlarge the charging provision.

Conclusion: Sales tax was not leviable on the supply of labour, and deduction at source from labour bills was unauthorized.

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