Works contract purchases under the then-applicable tax provision qualified for concessional treatment during the relevant assessment period.

Goods purchased on form XVII and used in execution of a works contract attracted concessional tax under section 3(3)(iii) of the Tamil Nadu General Sales Tax Act, 1959, as it stood from 1 April 1990 to 4 September 1991. The relevant statutory provision expressly covered such goods during the assessment period, so the concession could not be denied on the ground that they were not used in manufacture of a new commodity. The authorities were therefore wrong to ignore the provision in force for 1990-91, and the assessment had to be aligned with the statutory concession available for that period.

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Issues: Whether goods purchased on form XVII and used in execution of works contract were entitled to concessional tax under section 3(3)(iii) for the relevant assessment period, and whether the authorities erred in not applying the provision in force for 1990-91.

Analysis: Section 3(3)(iii) of the Tamil Nadu General Sales Tax Act, 1959, as applicable during the period from 1 April 1990 to 4 September 1991, expressly covered goods used in the execution of works contract. The assessee had purchased the goods on form XVII for use in works contract during the relevant assessment year, and the benefit of the concessional rate was therefore available under the then prevailing statutory provision. The authorities below had proceeded on an incorrect understanding by ignoring the relevant sub-clause governing the assessment period.

Conclusion: The assessee was entitled to the concessional rate of tax under section 3(3)(iii), and the disallowance of the concession was unsustainable.

Final Conclusion: The revision was allowed and the assessment was brought in line with the statutory concession available for the relevant period.

Ratio Decidendi: Where the statutory provision in force for the relevant assessment period expressly grants concessional tax on goods used in the execution of works contract, the benefit cannot be denied merely because the goods were not used in manufacture of a new commodity.

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