TaxTMI 
TaxTMI 
1957 (3) TMI 52
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....08-0-0 Balance turnover 1,96,486-0-0". 3. Section 2(1) of the Travancore-Cochin General Sales Tax Act, 1125, defines the expression "works contract" as follows: " 'works contract' means any agreement for carrying out for cash or for deferred payment or other valuable consideration the construction, fitting out, improvement or repair of any building, road, bridge, or other immovable property or the fitting out, improvement or repair of any movable property." That the contracts concerned do come within the ambit of the definition is not disputed by the petitioner. 4. The main contention before us is the same as that advanced by the petitioner with success before the High Court of Madras in Gannon Dunkerley & Co. (Madras), Ltd. v. The State of Madras1. In that case it was held: "The legislative power of the Provincial Legislature under the Government of India Act, 1935, to levy a tax on the sale of goods is confined and restricted only to the transaction of sale as understood by the Parliament of the United Kingdom in the law relating to the sale of goods and any attempt by the Legislature to tax under the guise of or under the preten....
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....ithin the taxing field a 'sale' unmixed with any other transaction but also pick out a sale from the composite transaction of a building contract were not beyond the powers of the Provincial Legislature. When entry No. 48 in List II of the Seventh Schedule of the Government of India Act, 1935, was framed it conferred on the Provincial Legislature powers of the widest amplitude to tax the sale of goods in all its aspects and forms. The necessary condition for the impost, however, was that there should be a sale of goods. The selection of the taxable event and the severance of transactions of sale from other transactions in which they might be embedded was a necessary part of the power. If a building contract is not split up into its component parts, that is to say, material and labour, in legislative practice relating to the ordinary regulation of sale of goods, there is no warrant for holding that it cannot be so split up even for purposes of taxation. Building materials are goods and there is payment for materials although it is not made separately but as part of a larger amount. The supply of goods is tantamount to the sale thereof." The Nagpur view was adopted in Badruddin v. St....
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.... the sale or purchase of goods other than newspapers) of List II of the Seventh Schedule of the Constitution of India. The Travancore-Cochin General Sales Tax Act, 1125, received the assent of His Highness the Rajpramukh on the 5th January, 1950, and was published in the Government Gazette dated the 17th January, 1950. The Government of India Act, 1935, had no application to Travancore or Cochin and we entertain no doubt that the validity of a pre-Constitution enactment like the Travancore-Cochin General Sales Tax Act, 1125, is not dependent on any of the entries in the Seventh Schedule to the Constitution. 9.. Section 1(3) of the Travancore-Cochin General Sales Tax Act, 1125, provides: "It shall come into force on such date as the Government may, by notification in the Gazette, appoint." It is true that the Act was brought into force only on the 30th May, 1950, by virtue of a notification published after the Constitution came into force (Notification No. SR 1-353-A/49/R.D. dated the 29th May, 1950, and published in the Travancore-Cochin Government Gazette dated the 30th May, 1950). Article 372 of the Constitution provides for the continuance in force of all the existing laws an....
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....State List (List II which enumerates 65 subjects which will come within the exclusive competence of the State Legislature) and the Concurrent List (List III which enumerates 47 items in respect of which both the Union and State Legislatures will have concurrent powers of legislation, provision being made for a Union law in the concurrent field overriding a State law in the event of a conflict between them). The partition of legislative power in this fashion, however, is for the purposes of legislation subsequent to the Constitution and it is impossible to accede to the contention that the validity of an Act passed by a competent Legislature prior to the Constitution has also to be tested in the light of the legislative distribution of powers effected by the Seventh Schedule. 12.. In Sagar Mal v. The State[1951] A.I.R. 1951 All. 816., Malik, C.J., dealt with a similar contention as follows: "Article 246 of the Constitution distributes the legislative powers between the Parliament of the Union and the State Legislatures. It has nothing to do with laws already made and, if those laws are not contrary to any provisions of the Constitution, it cannot be said that those laws are not v....
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.... Tax Act, 1124, in the Travancore area of the State. Those Acts were repealed only by section 27 of the Travancore-Cochin General Sales Tax Act, 1125, when it came into force on the 30th May, 1950. It follows that in view of the specific provision of Article 277 also it has to be held that such a tax can continue to be levied after the commencement of the Constitution irrespective of the partition of the legislative power effected by Article 246 and the entries in the three Lists of the Seventh Schedule. 14.. In Hazari Mal Kuthiala (Firm) v. Income-tax Officer, Special Circle, Ambala Cantt.[1956] 30 I.T.R. 500; A.I.R. 1957 Punj. 5. , Bhandari, C.J., said that the three expressions, levy, assessment and collection, occurring in section 13 of the Finance Act, 1950, "are of the widest significance and embrace in their broad sweep all the proceedings which can possibly be imagined for raising money by the exercise of the power of taxation." According to him "'assessment' is the official determination of liability of a person to pay a particular tax. 'Collection' is the power to gather in money for taxes, by enforced payment if necessary. The levy of taxes is generally a legislative ....
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....e actionable claims, stocks and shares and securities;" of "sale" in section 2(j): "'Sale' with all its grammatical variations and cognate expressions means every transfer of the property in goods by one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration and includes also a transfer of property in goods involved in the execution of a works contract, but does not include a mortgage, hypothecation, charge or pledge;" and of "turnover" in section 2(k): " 'turnover' means the aggregate amount for which goods are either bought by or sold by a dealer, whether for cash or for deferred payment or other valuable consideration, provided that the proceeds of the sale by a person of agricultural or horticultural produce grown by himself or grown on any land in which he has an interest whether as owner, usufructuary mortgagee, tenant or otherwise, shall be excluded from his turnover: Subject to such conditions and restrictions, if any, as may be prescribed in this behalf: (i) the amount for which goods are sold shall, in relation to a works contract, be deemed to be the amount payable to the dealer for carrying out such contract....