Works-contract goods transfer and Tribunal consistency: no taxable sale on the facts, and subordinate authorities must follow settled view.

Goods and materials purchased from outside the State and handed to contractors for erection of transmission lines, substations and power grids were not treated as a taxable sale under the Jammu and Kashmir General Sales Tax Act, 1962 on the facts found, because the goods remained under the assessee's ownership and no consideration was shown for a transfer to the contractors. The position was linked to the statutory definition applicable to the relevant period, with later deletion of works-contract transfer from the charging concept noted. The same reasoning also confirmed that subordinate authorities must follow the Tribunal's settled view unless there is a change in law or materially different facts, and any departure must be reasoned.

---

---

Issues: (i) Whether the transaction between the assessee and its contractors, whereby goods and material purchased from outside the State were handed over for erection and establishment of transmission lines, sub-stations and power grids, amounted to a sale exigible to tax under the Jammu and Kashmir General Sales Tax Act, 1962. (ii) Whether the authorities subordinate to the Tribunal were bound to follow the Tribunal's earlier view on the same question on the principle of consistency and judicial discipline.

Issue (i): Whether the transaction between the assessee and its contractors, whereby goods and material purchased from outside the State were handed over for erection and establishment of transmission lines, sub-stations and power grids, amounted to a sale exigible to tax under the Jammu and Kashmir General Sales Tax Act, 1962.

Analysis: For the period up to 15.05.1997, the statutory definitions covered transfer of property in goods involved in execution of works contract, and also transfer of the right to use goods for consideration. From 15.05.1997 onward, the definition of sale underwent change and the transfer of property in goods involved in works contract was deleted from the charging concept. On the facts found, the goods purchased by the assessee remained under its ownership and dominion when handed to contractors, and no consideration was shown for any transfer to the contractors. The reference material also did not justify treating the contractor-side arrangement as a taxable sale by the assessee for the relevant period, though the possibility of taxability in a different statutory or factual setting was left open.

Conclusion: The transaction did not amount to a sale under the Act for the relevant period and was not exigible to sales tax; the answer to this issue is in favour of the assessee.

Issue (ii): Whether the authorities subordinate to the Tribunal were bound to follow the Tribunal's earlier view on the same question on the principle of consistency and judicial discipline.

Analysis: A quasi-judicial hierarchy requires subordinate authorities to follow the legal position laid down by the Tribunal unless there is a change in law or a materially different factual matrix. Deviation from an earlier binding view must be reasoned, because disregard of settled Tribunal law creates uncertainty and judicial indiscipline. The Court emphasized that a different view may be taken only where justified by a change in law or facts, and even then the reasons for departure must be stated.

Conclusion: The subordinate authorities were bound to follow the Tribunal's earlier view, subject only to justified departure on change of law or facts; this issue is also in favour of the assessee.

Final Conclusion: The reference was answered in favour of the assessee on the taxability question, and the Court reaffirmed that subordinate authorities must adhere to the Tribunal's settled view unless a lawful basis for departure exists.

Ratio Decidendi: A transfer of goods to contractors is not taxable as sale unless the statutory definition, as applicable to the relevant period, brings that transaction within the charging concept and the transfer is supported by the elements required by the Act; subordinate quasi-judicial authorities must follow the Tribunal's binding legal position absent a justified change in law or facts.

---