TaxTMI 
TaxTMI 
1992 (11) TMI 262
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....nder section 12A. 3.. On merits, the petitioner contended that his objections were not considered by the assessing authority while passing the order. 4.. It is too late for the petitioner to contend that the amendment to the Constitution is invalid. If so, automatically explanation (3-A) to section 2(1)(t) also cannot be challenged. The scope of the said explanation will have to be understood in the light of the amendment made to the Constitution. 5.. Faced with this situation, Mr. B.V. Katageri contended that the assessing authority could have confined the tax only in respect of the turnover representing the value of the goods and that the element of service which is inherent in the sale of articles in a hotel should be valued and excluded from the turnover. 6.. In support of this contention, a decision of the Supreme Court in Builders Association of India v. Union of India [1989] 73 STC 370 was relied upon. The Supreme Court was concerned with sub-clause (b) of clause (29-A) of article 366. According to this "tax on the sale or purchase of goods" includes a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a....
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.... the execution of a works contract. The emphasis is on the transfer of property in goods (whether as goods or in some other form). The latter part of clause (29-A) of article 366 of the Constitution makes the position very clear. While referring to the transfer, delivery or supply of any goods that takes place as per sub-clauses (a) to (f) of clause (29-A), the latter part of clause (29-A) says that 'such transfer, delivery or supply of any goods' shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made. Hence, a transfer of property in goods under sub-clause (b) of clause (29-A) is deemed to be a sale of the goods involved in the execution of works contract by the person making the transfer and a purchase of those goods by the person to whom such transfer is made. The object of the new definition introduced in clause (29-A) of article 366 of the Constitution is, therefore, to enlarge the scope of 'tax on sale or purchase of goods' wherever it occurs in the Constitution so that it may include within its scope the transfer, delivery or supply o....
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....ect to the same restrictions and conditions. Ordinarily unless there is a contract to the contrary in the case of a works contract the property in the goods used in the construction of a building passes to the owner of the land on which the building is constructed, when the goods or materials used are incorporated in the building. The contractor becomes liable to pay the sales tax ordinarily when the goods or materials are so used in the construction of the building and it is not necessary to wait till the final bill is prepared for the entire work." At page 402, the Supreme Court observed: "We are surprised at the attitude of the States which have put forward the plea that on the passing of the 46th Amendment the Constitution had conferred on the States a larger freedom than what they had before in regard to their power to levy sales tax under entry 54 of the State List. The 46th Amendment does no more than making it possible for the States to levy sales tax on the price of goods and materials used in works contracts as if there was a sale of such goods and materials. We do not accept the argument that sub-clause (b) of article 366(29-A) should be read as being equivalent to....
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....hings, linen, crockery and cutlery and in the eating place, the hotelier may add music or floor dancing, etc., also as part of the services. Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi [1980] 45 STC 212 (SC) was rendered on a review petition seeking the review of the earlier decision. The review petition was dismissed by the Supreme Court. While dismissing the review petition, the scope of the earlier decision was explained. The Supreme Court pointed out that the relevant facts were brought out in the special leave petition before the Supreme Court and those facts were reproduced at page 217 of [1980] 45 STC 212 (Northern India Caterer's case) (also reported in AIR 1980 SC 674 at 678). Thereafter, the Supreme Court referred to the apprehensions of the States which made them to file the review petitions. The Supreme Court opined that there was no scope for such an apprehension at all. At page 218 of [1980] 45 STC 212 [Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi], the Supreme Court held: "It appears from the submissions now made that the respondent as well as other States are apprehensive that the benefit of the judgment of this Cou....