Warranty and after-sale service do not by themselves create a works contract; deducted tax was refundable on these facts.

A supply of an ultrasound imaging system did not amount to a works contract merely because warranty and after-sale service were included; absent a bilateral agreement for installation, repair or similar execution of work, the statutory definition was not met. The dealer had already discharged output tax, the tax deducted at source had been credited to the Government, and the relevant period stood assessed without any adverse tax liability. In those circumstances, withholding refund served no legal purpose, and the dealer was entitled to refund of the deducted tax with interest if payment was delayed.

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Issues: Whether the amount of tax deducted at source from the sale proceeds was refundable to the dealer, or whether the claim had to await assessment on the footing that the transaction was a works contract.

Analysis: The transaction was examined against the statutory definition of works contract and the refund provisions under the West Bengal VAT regime. The arrangement showed supply of an ultrasound imaging system on quotation and purchase order terms, but there was no bilateral agreement for installation, repair, or other execution of work of the kind required to constitute a works contract. The existence of warranty or after-sale service, without more, was insufficient to convert the supply into a works contract. The dealer had already accounted for and paid the output tax on the sale, the tax deducted at source had been deposited in the Government exchequer, and the assessment for the relevant period had proceeded on deemed assessment without any finding of tax liability adverse to the dealer. In those circumstances, withholding refund would serve no legal purpose and would not be justified on the ground of assessment or unjust enrichment.

Conclusion: The dealer was entitled to refund of the tax deducted at source.

Final Conclusion: The refund claim succeeded, and the respondents were directed to return the deducted amount with interest in default of timely payment.

Ratio Decidendi: A supply transaction does not become a works contract merely because it carries a warranty or after-sale service; in the absence of a bilateral works-contract arrangement and where no tax liability survives on assessment, tax deducted at source must be refunded under the refund provisions.

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