TaxTMI 
TaxTMI 
2008 (1) TMI 851
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....xy powder coating. The assessee carries out powder coating of the cabinets supplied by the customers. This involved sale of paint by the assessee to its customers. The powder coated items are used by the customers in the manufacture of their finished products. It, therefore, became an industrial raw material or component part of the product of the customers. These set of facts would show that circumstances warranted the issuance of form 18 declaration by the customers to the petitioner/assessee, for claiming the benefit of concessional rate of tax, which were issued. The assessing officer has proceeded to find that the assessee is engaged in a pure works contract. The work is executed by using powder paint and other consumables purchased by the assessee. It is found that the petitioner/assessee is not a manufacturer and hence it is not eligible for concessional rate. The assessing officer after issuance of notice and on consideration of the reply of the assessee, rejected the claim of the petitioner/assessee for reduced rate of tax at three per cent claimed on the basis of form 18 declaration. It is found that the assessee is not a supplier of raw materials or component parts and....
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....T Act, 1963 against valid form 18 declaration which is availble to normal sale can be denied to the deemed sale, such as, transfer of raw materials to an industry not in the form of goods (in the form of executing a works contract)? (iii) Whether all the privileges and concessional rate application allowable to sales are allowable to transfer of goods involved in the execution of works contract which is deemed sales by treating sales and deemed sales at par? (iv) Whether the Tribunal is justified in non-considering the fact that the same Bench of the same Sales Tax Appellate Tribunal in the case of this appellant itself for the year 1996-97 admitted early as per order in T.A. No. 341 of 2002 and C.O. No. 36 of 2002 dated June 19, 2003 that the appellant is eligible for concessional rate on the strength of form 18 declarations as per section 5(3) of the KGST Act, even after the appellant filed a rectification petition and pointed out this irregularity before the Appellate Tribunal? (v) Whether the Tribunal can contradict to its own judgment held in an earlier year on the same question of law and fact, without distinguishing and without finding any new facts or reasons for such co....
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....ioner had neither used the epoxy powder for its own use, nor manufactured/sold any finished products by itself and it has only transferred raw materials to the industrial units through execution of works contract, thus rendering it eligible to get the concessional rate under section 5(3) of the Act. It is further contended that once the form 18 declaration is issued by the purchaser, then inevitably the assessee to whom the form 18 declaration was issued, is entitled to claim the benefit of concessional rate and if there is any misuse in form 18 declaration insofar as the purchaser who issued the form 18 declaration does not use the goods in the manufacture of other products, then the law contemplates action being taken against the purchaser who issued form 18 declaration and the law does not permit denial of the concessional rate to the assessee who supplied the raw materials by only charging the concessional rate. Per contra, the learned Senior Government Pleader would contend that the petitioner/assessee is not entitled to the benefit of concessional rate under section 5(3) of the Act. Originally, section 5(3) read as follows: "(3) Notwithstanding anything contained in ....
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....by the dealer to whom the goods are sold containing the prescribed particulars in the prescribed form." Later by Act 19 of 1994 and with effect form April 1, 1994 it came to be as follows: "(3)(1) Notwithstanding anything contained in sub-section (1) or sub-section (2), the tax payable by a dealer in respect of any sale of industrial raw materials, component parts, containers or packing materials which is liable to tax at a rate higher than two and a half per cent when sold to industrial units for use in the production of finished products inside the State for sale or for packing of such finished products inside the State for sale, as the case may be, shall be at the rate of only two and a half per cent on the taxable turnover relating to such industrial raw materials, component parts, containers or packing materials, as the case may be: Provided that this sub-section shall not apply where the sale of such finished products is not liable to tax either under this Act or under the Central Sales Tax Act, 1956 (Central Act 74 of 1956) or when such finished products are exported outside the territory of India." The present provision contained in sub-section (3) of section 5 has come....
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.... Act as follows: "section 2(xxi) 'Sale' with all its grammatical variations and cognate expressions means every transfer whether in pursuance of a contract or not 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, but does not include a mortgage, hypothecation, charge or pledge: " Explanation (3A) to the definition of the word "sale", reads as follows: "A transfer of property in goods whether as goods or in some other form involved in the execution of a works contract shall be deemed to be a sale." Undoubtedly, the petitioner/assessee was in the assessment years in question, entrusted with the works contract. The works contract consisted essentially of the assessee electro-painting the cabinets supplied by the customers. For carrying out electro-painting, the assessee had made use of epoxy powder which is purchased by it. According to the assessee, insofar as the assessee has transferred the property in the paint to the purchasers in the course of the execution of the works contract and the paint being an industrial raw material/component part, the assessee is entitled to....