Inter-State works-contract goods cannot be taxed again under local turnover rules when central sales tax already applies.

Inter-State goods used in a works contract could not be included again in U.P. taxable turnover where central sales tax had already applied to their movement from Delhi to Uttar Pradesh. The amended works-contract provision required exclusion of the sale value of goods covered by sections 3, 4 and 5 of the Central Sales Tax Act, along with labour and specified deductions, but the authorities had taxed the full receipts without applying that formula. The inclusion of those goods in local trade tax was therefore unsustainable, and the assessments were set aside for fresh computation under the correct statutory framework.

---

---

Issues: Whether the value of goods moved from Delhi to Uttar Pradesh in execution of a works contract, on which central sales tax had already been charged, could be included in taxable turnover under the U.P. trade tax law, and whether the assessments required recomputation under the amended works-contract provision.

Analysis: The goods were taken from Delhi to Uttar Pradesh pursuant to a works contract for fabrication and fixing of aluminium doors, windows, ventilators and partition work. The amended works-contract provision required exclusion from the contract turnover of the sale value of goods covered by sections 3, 4 and 5 of the Central Sales Tax Act, 1956, as well as exclusion of labour charges and other specified components. The authorities had treated the entire receipts as taxable without applying the amended statutory formula. Since the goods were admittedly moved in the course of inter-State trade and were covered by section 3 of the Central Sales Tax Act, 1956, their value could not be taxed again under the U.P. sales tax regime merely because the work was ultimately executed in Uttar Pradesh.

Conclusion: The inclusion of the inter-State goods in the taxable turnover was unsustainable, and the assessments had to be set aside for fresh determination in accordance with the amended provision.

Final Conclusion: The revisions succeeded, the assessee obtained relief, and the assessments were remitted for reconsideration under the correct statutory framework.

Ratio Decidendi: Goods moved in the course of inter-State trade for execution of a works contract, and already falling within the Central Sales Tax Act framework, cannot be subjected again to local trade tax when the governing works-contract provision mandates deduction of their sale value from the contract turnover.

---