Works contract resale tax applies to goods transferred in any form; circulars cannot override the charging provision.

Section 9B of the M.P. Commercial Tax Act, 1994 was held to apply to goods used in executing a works contract even where the goods were consumed or transformed into another form, because section 2(t)(ii) treats transfer of property in such goods as a sale in any form. The argument that resale tax could arise only if the goods remained in the same form was rejected as contrary to the statutory language, and the levy was upheld. A contrary Commissioner's circular could not override the Act, and section 68 was held incapable of displacing the charging provision or the operation of sections 9B and 2(t)(ii).

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Issues: (i) Whether section 9B of the M.P. Commercial Tax Act, 1994 applies to goods used in the execution of a works contract even when the goods are consumed or transformed into another form; (ii) Whether the Commissioner's circular or section 68 could displace the plain statutory operation of section 9B read with section 2(t)(ii).

Issue (i): Whether section 9B of the M.P. Commercial Tax Act, 1994 applies to goods used in the execution of a works contract even when the goods are consumed or transformed into another form.

Analysis: Section 2(t)(ii) defines sale to include transfer of property in goods involved in the execution of a works contract, whether as goods or in some other form. Section 9B levies tax on the resale of goods specified in Schedule II, and its application depends on turnover. The Court held that once property in goods is transferred in any form in the course of a works contract, the transaction falls within the statutory concept attracting tax under section 9B. The contention that tax could be levied only if the goods were resold in the same form was rejected as inconsistent with the statutory language.

Conclusion: Section 9B applies to goods transferred in the execution of a works contract even when they are used or transformed in another form, and the levy was upheld.

Issue (ii): Whether the Commissioner's circular or section 68 could displace the plain statutory operation of section 9B read with section 2(t)(ii).

Analysis: The circular relied upon by the assessees stated that use of goods in construction would not amount to resale, but the Court held that a circular contrary to the statutory text cannot prevail over the Act. Section 68 deals with determination of rate of tax and cannot be used to nullify the statutory intent or override the charging provision. The Court therefore declined to accept the circular as binding or as a basis to exclude the levy.

Conclusion: Neither the circular nor section 68 displaced the statutory levy under section 9B.

Final Conclusion: The writ petitions failed because the statutory scheme treated transfer of goods in a works contract as taxable resale and the contrary administrative circular could not alter that position.

Ratio Decidendi: Where the statute includes transfer of property in goods involved in a works contract whether as goods or in some other form, tax on resale cannot be denied on the ground that the goods were consumed or transformed, and an administrative circular contrary to the statute has no binding force on the court.

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