TaxTMI 
TaxTMI 
2010 (3) TMI 1001
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....gaged in the business of construction works of Central Public Works Department and Telecom Departments. In the course of the execution of the works contracts, buildings material like gitti, sand, cement, timber, plywood, aluminum, steel, bricks, etc., are used. Iron, steel and cement are supplied by the respective Government Departments for whom the work is executed. The assessment under the Madhya Pradesh Commercial Tax Act, 1994 (hereinafter referred to as, "the Act") for the period April 1, 2000 to March 31, 2001 was completed. Order (P/1) dated January 28, 2004 was passed. The main dispute raised before the assessing officer was whether value added tax (VAT) as contained in section 9B of the Act is leviable on material consumed in....
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....y the assessment order and order passed in revision, the writ petitions have been preferred. Facts and grounds in other cases are similar. Shri Mukesh Agrawal, learned counsel appearing on behalf of the petitioners, has submitted that there is circular issued by the Commissioner pointing out that the items consumed in the works contract cannot be said to be covered in the resale as provided under section 9B of the Act. The said circular is binding on the assessing authority. It is also submitted that section 9 is invoked at point when goods are purchased by the petitioners, thus, under section 9B resale tax could not have been levied on the petitioners. He has relied upon the decisions to be referred later. Shri Purushendra Kaurav, le....
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....encement of the Madhya Pradesh Vanijyik Kar (Sanshodhan) Adhiniyam, 1998 exceeds rupees ten lacs and every other dealer whose turnover in a year first exceeds rupees ten lacs shall, from the commencement of the aforesaid Act or from the date on which the turnover exceeds rupees ten lacs, as the case may be, be liable to pay tax on the resale of any goods specified in Part II to VII of Schedule II at the rate of four per cent in case of declared goods and eight per cent in case of other than declared goods on such part of his turnover in respect of the said goods which remains after deducing therefrom- (a) . . . (b) sale price of such goods at the hands of the registered dealer from whom they have been purchased; (c) the amount arri....
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....n case such goods are used in process of construction, it would not amount to resale. We are not able to succumb to the aforesaid interpretation adopted by the Commissioner. In view of the provisions of section 2(t)(ii) read with section 9B of the Act circular cannot override the statutory provision nor interpretation made contrary to intentment of the statutory provision can be said to be binding. The apex court in Commissioner of Sales Tax, U.P. v. Indra Industries [2001] 122 STC 100; [2002] 35 VKN 91 has laid down that circular issued by the sales tax authorities is not binding on courts, it is binding on the taxing authority. Section 68 has also been referred to by the counsel appearing on behalf of the petitioners. Section 68(1) pro....
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....ttress the submission raised by the petitioners in view of provision 2(t)(ii) read with section 9B of the Act. The learned counsel on behalf of the petitioners has relied upon the decision of the apex court in Gannon Dunkerley & Co. v. State of Rajasthan [1993] 88 STC 204. The decision is of no help to the petitioners. The question arose before the Supreme Court is of competence to tax deemed sale in the course of inter-State trade. At the same time with respect to value of the goods involved in the execution of the contract it was observed that measure of tax may be arrived at by reducing from value of works contract expenses incurred on labour and other services, where account books are not maintained or not reliable, percentage of val....