Works contract turnover taxable under sales tax law where goods transfer occurs in some other form.

The constitutional amendment in Article 366(29A)(b) expanded the concept of sale to include transfer of property in goods involved in execution of a works contract, whether as goods or in some other form. The Kerala General Sales Tax Act, as amended from 1 April 1984, defined dealer, sale, turnover and works contract so that such transfers fell within the charging scheme. Read with the relevant definitions, section 5 authorised tax on turnover of goods transferred in execution of works contracts, subject to constitutional and statutory limits. The absence of the words "in some other form" in every definition did not defeat the levy, because the legislative intent and constitutional provision covered the taxable transfer.

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Issues: Whether the turnover of materials transferred in the execution of a works contract, including transfer in some other form and not as goods as such, was liable to tax under the Kerala General Sales Tax Act, 1963 for the assessment years 1984-85, 1985-86 and 1986-87.

Analysis: The constitutional amendment inserting Article 366(29A)(b) enlarged the concept of sale to include transfer of property in goods involved in the execution of a works contract, whether as goods or in some other form. The Act, as amended with effect from 1 April 1984, defined dealer, sale, turnover and works contract so as to bring such transfers within the charging scheme. Section 5 read with the relevant definitions enabled tax on the turnover of goods transferred in execution of works contracts, subject to the constitutional and statutory disciplines. The absence of the words "in some other form" in every definition did not defeat the levy, because the legislative intent and the constitutional provision covered the taxable transfer.

Conclusion: The turnover of materials transferred in the execution of the works contract was taxable under the Act. The contention that such turnover could not be assessed because the goods were transferred in some other form was rejected.

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