Works-contract transfers are deemed sales and tax must follow scheduled rates, not the residuary entry.

Property in goods transferred during execution of a works contract is treated as a deemed sale under Article 366(29-A)(b), so the applicable tax treatment follows the constitutional and statutory scheme for works-contract goods. Where no specific uniform works-contract rate is prescribed, goods falling within statutory schedules are to be taxed at the rates applicable to those constituent goods. The residuary entry is confined to goods not covered by any schedule and cannot be used to tax constituent materials of hot mix material at a general rate merely because they lose identity in the works contract.

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Issues: Whether hot mix material transferred in execution of a works contract is liable to tax at the prescribed rates applicable to its constituent goods or at the general residuary rate.

Analysis: The definition of sale under the Act covers transfer of property in goods involved in the execution of a works contract, and such transfer is a deemed sale under Article 366(29-A)(b) of the Constitution of India. The constitutional restrictions in Article 286 apply to such transactions, and the State may prescribe a uniform rate for works-contract goods, but where no such uniform rate is prescribed, goods falling within the statutory schedules must be taxed at the rates applicable to those goods. The residuary clause is confined to goods not covered by any schedule and cannot be used to tax constituent materials of hot mix material at a general rate merely because they lose their identity in the works contract.

Conclusion: The hot mix material transferred in the works contract cannot be taxed at the general residuary rate and must be taxed according to the prescribed rates applicable to its constituent goods.

Final Conclusion: The appeal succeeds and the assessee's liability is confined to tax treatment under the scheduled rates applicable to the goods involved in the works contract.

Ratio Decidendi: Goods transferred in the execution of a works contract are deemed sales and, unless a uniform works-contract rate is specifically prescribed, they must be taxed according to the rates applicable to the constituent goods and not under the residuary entry.

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