Works contract taxability requires concrete findings on actual transfer and use, not conjectural apportionment or presumptive estimates.

In works contract assessments under the U.P. Trade Tax Act, taxability and any exclusion for goods allegedly covered by the Central Sales Tax Act must rest on concrete findings of actual transfer and use in execution of the contract. The Tribunal's approach was unsustainable because it accepted that the factual issue could not be resolved by conjecture, yet still fixed a 75:25 apportionment and denied relief without recording specific findings on the goods' actual use and transfer. The matter was therefore remitted for fresh determination on those factual issues in accordance with law.

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Issues: Whether the Tribunal could sustain an apportionment of the value of goods used in a works contract on a conjectural basis and whether the matter required remand for a fresh determination of actual transfer and use of the goods, including goods claimed to be covered by Sections 3, 4 and 5 of the Central Sales Tax Act, 1956.

Analysis: The dispute arose from assessments under Section 3-F of the U.P. Trade Tax Act, 1948 in respect of works contracts for construction. The assessing authority and the first appellate authority had allowed only partial relief, while the Tribunal itself found that the question whether the articles had actually been transferred in execution of the works contract could not be resolved by mere supposition. Having so held, the Tribunal nevertheless fixed a 75% to 25% apportionment and also disallowed relief for goods said to be covered by Sections 3, 4 and 5 of the Central Sales Tax Act, 1956 without recording a concrete finding on whether those goods were actually used and transferred in the works contract.

Conclusion: The Tribunal's findings were unsustainable as they were based on surmises and conjecture, and the matter had to be remitted for fresh consideration on the factual issues of actual transfer and utilisation of the goods.

Final Conclusion: The revision succeeded to the extent that the Tribunal's order was set aside and the matter was sent back for a fresh decision in accordance with law and the observations made.

Ratio Decidendi: In a works contract assessment, taxability and allowable exclusion must be determined on concrete findings of actual transfer and use of goods, and not on conjectural apportionment or presumptive estimates.

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