2005 (2) TMI 808

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.... Sales Tax Rules, 1957 ("the Rules", for short) which provides for exclusion of certain amount from the total turnover of the value of goods which has to be taken into consideration for the purpose of levy of tax under section 5-B of the Act. The contention urged on behalf of the petitioner is that in the guise of excluding certain amount from the value of the turnover in respect of the goods involved in the execution of a works contract, the authorities are subjecting even that part of the turnover which, in fact, enjoys an exemption otherwise also and as the rule has the effect of bringing to tax even such portion of turnover which has been exempted, the rule is bad, ultra vires the provisions of the section and it has to be struck down a....

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....y of tax under the section, the rule is bad. In this regard, the learned counsel seeks to rely upon the decision of the honourable Supreme Court in Builders Association of India v. Union of India reported in [1989] 73 STC 370, and also the decision of the Andhra Pradesh High Court in the case of Media Communications v. Government of Andhra Pradesh reported in [1997] 105 STC 227, rendered in the context of interpretation of an analogous rule framed under the Andhra Pradesh General Sales Tax Act and had struck down section 5-F of the Act particularly, the proviso of section 5-F which had employed the words "in the same form in which they were purchased by the contractor". The submission of Sri Narayan, learned counsel appearing for the ....

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....e seeking to tax what is not excluded under this rule if the conditions thereunder is not fulfilled. The rule by itself does not have the effect of creating a liability on any part of the turnover but has only the effect of excluding something while computing the turnover. If the rule 6(4)(m)(i) does only to exclude some part of the turnover, it cannot be said that it is bad as for being ultra vires section 5-B or any other provision. The rule definitely cannot control section 5-B of the Act. The charge is under section 5-B and scope and understanding of the liability under section 5-B is not dependent on the understanding of rule 6(4)(m)(i) as is sought to be contended by the learned counsel for the petitioner. If any authority subjects....