Bore-well driving alone is not civil construction work; composite contracts with materials may attract tax liability.

Driving a bore-well, by itself, is treated as a mechanical activity and does not ordinarily amount to civil construction work or a works contract liable to tax at the compounded rate. Where the contract also includes supply of casing, pipes, motor, pump house, protective walls, or other material-based construction, the work may become a composite civil construction contract and tax liability may arise accordingly. Liability depends on the actual contract terms, bills, and payments, which must be verified to determine whether the bore-well work is simpliciter or composite in nature.

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Issues: Whether driving of a bore-well, by itself, constitutes civil construction work so as to attract tax at the compounded rate under section 7(7) of the Kerala General Sales Tax Act, 1963.

Analysis: Construction of an ordinary well generally involves digging and removal of earth, and by itself does not ordinarily involve supply of materials. The same principle was applied to bore-wells, because driving a bore-well is essentially a mechanical process and, when undertaken without supply of materials, does not amount to works contract liability. At the same time, where the contract also includes supply of casing, pipes, motor, pump house, protective walls, or other construction involving materials, the composite work may assume the character of civil construction work and tax liability may arise accordingly. The matter required verification of the actual contract terms, bills, and payments, which had not been examined by the authorities below.

Conclusion: Bore-well driving simpliciter is not civil construction work liable to tax at the compounded rate, but composite bore-well contracts involving supply of materials or allied construction may attract tax under section 7(7) of the Kerala General Sales Tax Act, 1963. The matter was remitted for recomputation after verification of the contract.

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