Court rules in favor of Tata Steel Ltd. in tax dispute over cement supply to contractor. No additional levy allowed.

The High Court ruled in favor of the Assessee, Tata Steel Ltd., in a dispute over the additional levy of tax on the supply of cement to a contractor. Despite the transaction being deemed a second sale due to deductions from the contractor's bills, the Court held that since tax was already paid on the initial sale of cement, no further tax could be imposed. The Court emphasized that the failure to produce Form IX-C at the subsequent sale did not warrant a tax levy. As a result, the Court dismissed the writ petition by the State of Jharkhand without ordering any costs.

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Issues:
Challenge to order setting aside additional levy of tax on supply of cement to contractor.

Analysis:
- The dispute involves the challenge to an order setting aside the additional levy of tax on the supply of cement to a contractor by the Assessee, Tata Steel Ltd., during the period 1989-90 under the Bihar Finance Act, 1981.
- The Assessing Officer had levied tax on the supply of cement to the contractor by the Assessee, considering it as a second sale, despite tax being paid on the initial purchase of cement by the Assessee.
- The Appellate Authority rejected the Assessee's appeal, stating that the transaction amounted to a second sale as the Assessee deducted the price of cement from the contractor's bills.
- The Commercial Taxes Tribunal, in a revision application, allowed the appeal and held that the additional levy of tax on the supply of cement to the contractor was illegal.
- The State of Jharkhand challenged this decision in a writ petition before the High Court.

Arguments by State of Jharkhand:
- The State contended that the supply of cement by Tata Steel Ltd. to its contractor should be deemed a sale as the Assessee deducted the value of cement from the contractor's bill, making it a second sale.
- The State argued that even though tax was paid on the first point of sale, the Assessee was required to produce Form IX-C at the subsequent sale stage, which was not done, justifying the levy of tax by the Assessing Officer.

Arguments by Assessee:
- The Assessee argued that since cement was already taxed at the first point of sale, no tax should be levied on the subsequent sale to the contractor, even if it amounted to a second sale due to the deduction of the value from the bills.
- The Assessee contended that the production of Form IX-C was not mandatory, especially when tax had already been paid on the first sale of cement.

Court's Decision:
- The High Court acknowledged that the transaction of supplying cement to the contractor and deducting the amount from bills constituted a second sale.
- However, the Court emphasized that as cement was taxed only at the first point of sale and tax was already paid by the Assessee, no additional tax could be levied on the subsequent sale.
- The Court held that the failure to produce Form IX-C at the time of the subsequent sale did not justify a tax levy, as the cement had already been taxed at the first point of sale.
- Consequently, the Court dismissed the writ application filed by the State of Jharkhand, ruling in favor of the Assessee, Tata Steel Ltd., and declined to order any costs in the case.

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