Works-contract deduction provision and show-cause notice upheld as valid, with no jurisdictional or constitutional infirmity shown.

A State provision governing deduction for declared goods used in works contracts was upheld as intra vires because the constitutional limits on taxing deemed sales, including the restrictions under article 286 and the Central Sales Tax Act, were not shown to be exceeded on the pleaded facts. The challenge failed where no material established that the relevant goods were purchased in inter-State trade or that the provision imposed tax beyond the permissible ceiling on declared goods. A show-cause notice was also sustained because the issuing officer was duly empowered and the notice was treated as one for rectification of a mistake apparent from the record. The writ petition failed in full.

---

---

Issues: (i) Whether section 8(3)(iv)(a) of the Assam General Sales Tax Act, 1993, as amended, was ultra vires the Constitution of India and the Central Sales Tax Act, 1956, in so far as it allowed deduction only for declared goods purchased locally in Assam on payment of tax and used in works contracts; (ii) Whether the show-cause notice issued by the Assistant Commissioner of Taxes was without jurisdiction.

Issue (i): Whether section 8(3)(iv)(a) of the Assam General Sales Tax Act, 1993, as amended, was ultra vires the Constitution of India and the Central Sales Tax Act, 1956, in so far as it allowed deduction only for declared goods purchased locally in Assam on payment of tax and used in works contracts.

Analysis: The constitutional scheme under article 366(29A) recognises transfer of property in goods involved in execution of works contracts as a deemed sale, but such transactions remain subject to the restrictions under article 286 and the Central Sales Tax Act, 1956. The Court held that the State's taxing power over works-contract sales is confined by the constitutional prohibitions on taxing inter-State sales, outside-State sales, and import/export transactions, and by the restrictions applicable to declared goods under sections 14 and 15 of the Central Sales Tax Act, 1956. On the facts pleaded, the petitioner did not show that the goods for which deduction was claimed were purchased in inter-State trade and commerce or that section 8(3)(iv)(a) imposed tax beyond the permissible ceiling on declared goods.

Conclusion: Section 8(3)(iv)(a) of the Assam General Sales Tax Act, 1993, was held to be intra vires and valid, and the challenge to it failed.

Issue (ii): Whether the show-cause notice issued by the Assistant Commissioner of Taxes was without jurisdiction.

Analysis: The Court noted that the relevant rules had designated the Senior Superintendent of Taxes as the Assistant Commissioner of Taxes, and that under the Assam VAT Act, 2003, assessment powers had been delegated by notification. The notice was treated as one for rectification of mistakes apparent from the record, and no jurisdictional infirmity was found in its issuance.

Conclusion: The show-cause notice was held to be within jurisdiction and valid.

Final Conclusion: The writ petition failed in its entirety, as neither the constitutional challenge to the deduction provision nor the jurisdictional challenge to the notice was accepted.

Ratio Decidendi: A State provision governing works-contract turnover is valid where it operates consistently with the constitutional restrictions on taxing deemed sales and declared goods, and a show-cause notice issued by a duly empowered assessing authority cannot be struck down for lack of jurisdiction absent a demonstrated legal infirmity.

---