Works contract tax exclusion applies when outside-State goods were moved solely for contract execution, without extra notice requirements.

Goods procured from outside the State for execution of a works contract may be excluded from the taxable value where the movement was occasioned solely for that contract under Section 3-F(2)(b)(i) read with Section 3-F(1)(b) of the U.P. Trade Tax Act and Sections 3, 4 and 5 of the Central Sales Tax Act. The decisive question is the existence of that jurisdictional fact, which may be established from the surrounding documents and transactions. No additional requirement can be imposed that each item be expressly listed in the contract or separately notified to the contractee. The Tribunal's contrary approach was held unsustainable and the matter was remitted for reconsideration on the proper issue.

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Issues: Whether the benefit of the Central Sales Tax Act could be denied on the ground that the written works contract did not expressly stipulate the individual goods or that the contractee had not been separately informed of each import, where the goods were procured from outside the State solely for execution of the works contract.

Analysis: Under Section 3-F(2)(b)(i) read with Section 3-F(1)(b) of the U.P. Trade Tax Act, the value of goods covered by Sections 3, 4 and 5 of the Central Sales Tax Act has to be excluded from the value of the works contract. The controlling question is whether the movement of goods from outside the State was occasioned solely for execution of the works contract. If that jurisdictional fact is established by the surrounding documents and transactions, no further condition can be imposed requiring the goods to be specifically mentioned in the contract or requiring prior notice to the contractee. The Tribunal's reliance on absence of such stipulations was extraneous to the real issue.

Conclusion: The assessee could not be denied the statutory benefit on the ground adopted by the Tribunal. The Tribunal's order was unsustainable and was set aside, with the matter remitted for fresh consideration on the proper issue.

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