Works contract under VAT law cannot be treated as zero-rated sale when statute limits zero-rating to specified sales categories.

A transaction with TCS was held to remain a works contract under the West Bengal Value Added Tax Act, 2003, rather than a sale simpliciter. The Court distinguished the statutory definitions of sale and works contract, holding that the deeming fiction in Section 14 only brought the transfer of property in goods involved in execution of a works contract to tax. It refused to expand the definition of sale to include deemed sales for zero-rating purposes and held that Section 21A applied only to the specific categories of sales listed in Schedule AA. The transaction therefore did not qualify as zero-rated.

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Issues: Whether the transaction entered into by the dealer with TCS constituted a works contract liable to tax under the West Bengal Value Added Tax Act, 2003, and if so, whether it could still be treated as a sale simpliciter and zero-rated under Section 21A of the Act.

Analysis: The statutory scheme distinguished between a sale simpliciter under Section 2(39) and a works contract under Section 2(57). Section 14 created a deeming fiction only to bring transfer of property in goods involved in execution of a works contract to tax, while Section 21A extended zero-rating only to sales falling within the specific categories in Schedule AA. The inclusive wording in Section 2(39) could not be stretched to add deemed sales beyond the categories expressly mentioned. The Court declined to read words into the definition of sale or to treat a deemed sale under Section 14 as equivalent to a sale simpliciter for the purpose of zero-rating.

Conclusion: The transaction remained a works contract and did not qualify as a zero-rated sale; the challenge failed.

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