TaxTMI 
TaxTMI 
2013 (12) TMI 1586
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....88/2011, S.T.R.P. NO. 289/2011 , S.T.R.P. NOS. 291/2011 & 250-261/2012 , S.T.R.P. NOS. 292/2011 & 228-233/2012 , S.T.R.P. NOS. 293/2011 & 292-310/2012 , S.T.R.P. NO. 6/2012, S.T.R.P. NOS. 18/2012 & 217-227/2012, W.A. NO.3306/2011 & W.A. NOS.5405-5415/2011, W.A. NO.4828/2010 & W.A. NOS.5430-5494/2011 (T-KST), W.A. NO.740/2011 & W.A. NOS.4273-4295/2011 (T-RES), W.A. NO.3441/2011 & W.A. NOS.5394-5404/2011 (T-RES), W.A. NOS.16364/2011 & 16910-16923/2011 (T-RES). W.A. NO.3489/2011 & W.A. NOS.5389-5393/2011 (T-RES). W.A. NOS.1214-1229/2012 (T-RES). S.T.R.P. NOS. 90/2012 & 300-304/2013,. S.T.R.P. NOS. 108/2011 & 246-268/2011, S.T.R.P. NOS. 314/2012 & 97-119/2013 G.Sarangran and K.S. Ramababran JJ. Judgement As common question of law in all these batch of cases, they are clubbed together and decided by this common order. However, for the purpose of clarity, the facts in W.P Nos. 29932-33/2009 and W.P. Nos. 29046-48 of 2009 are set out hereunder. FACTS IN W.P. Nos. 29932-33/2009 2. The petitioner- M/s. Nagarjuna Construction Company limited is a Public Limited Company. It is engaged in undertaking of trunkey projects and other works contracts for governmental authorities or o....
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....d the same is in accordance with the provisions of the KVAT Act. He did not feel it necessary to continue the proceedings under section 39(1) of the KVAT act for reassessment and therefore, the proceedings initiated for the period March 2006 under section 39(1) of the KVAT act, 2003 was dropped. 4. The Joint Commissioner of Commercial Taxes by virtue of the power conferred on him under section 63(A) of the KVAT ACT, was of the view that the orders passed by the assessing authority were prima facie erroneous and prejudicial to the interest of the revenue of the State warranting interference. Therefore, he issued a show cause notice it is stated that in the schedule entry, works contract of civil works finds entry in serial No. 23 under the head " All other works contracts specified in VI schedule" and attracts taxes at 12.5%. However, the petitioner had offered the turnover of civil works at the rate of 4% and 12.5%, which is impermissible and not in accordance with the provisions of VI schedule to the KVAT Act.Then he has referred to the amounts involved in each subcontracts and was of the view that the taxable turnover in the works contract after allowing admissible deductions ....
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....e execution of works contracts of civil nature of buildings, is liable to tax under serial No. 23 of the Schedule at 12.5% only. The assessing authority has violated the provisions of the act and therefore, such orders are detrimental to the interest of the revenue and the revisional authority was justified in initiating proceedings under section 63A of the Act. The petitioner has challenged the show cause notice. A statutory remedy of preferring an appeal is provided under the Act, without exhausting the statutory remedy he has filed the writ petition. It is not maintainable. FACTS IN W.P. Nos.29046-48/2009 7. The assessee, M/s GR Engineering Private Limited is a dealer registered under the provisions of KVAT Act, 2003. During the month of October, 2008, they were awarded by Mangalore Refinery and Petrochemicals Limited, Mangalore (hereinafter referred to as 'MRPL' for brevity), with the execution of composite works contract of residual designing, detailed engineering, procurement of materials and bought out components and fabrication, construction, errectyion, inspection, testing, supp;y and commissioning of four mrmbers of mounded LPG Storage system for refuinery project a....
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....respect of these tax periods, which returns are also accepted by the first respondent. 9. The place of the business of the assessee was visited by the first respondent on 09.07.2009, and he verified the work orders issued by the contractee MRPL as also the Form A1 being the application made by the assessee before the Assisteant Commissioner of Central Excise, Mangalore and the license granted to it. After looking into the entire materials, the authorities came to the conclusion that the assessee was engaged in the activities of manufacturing of bullet tanks which are later to be installed in the MRPL project site. Thus the nature of work fell under the VI Schedule to the Act namely supply and installation of manufactured bullet tanks at the MRPL project site. Therfore, the authority came to the conclusion that even M.S.Plates/ sheets used as raw materials are declared goods, the goods manufacture namely bullet LPG tanks were altogether different commercial goods and liable to be taxed at the rate of 12.5%. The notice under section 39(1) of the Act, dated 18.08.2009 proposing to levy tax at the rate of 12.5% on th e amounts declared by the assessee was issued. He also proposed to....
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....SINGLE JUDGE 11. The learned single Judge who heard the Writ Petition held that a dealer registered under the Act shall be liable to tax and that such tax is leviable on the taxable turnover relating to transfer of property in goods whether as goods or in some other form, involved in the execution of the works contracts that are specified in the Sixth Schedule to the Act and at the specified therein. The levy is subject to the provisions of Sections 14 and 15 of the CST Act realting to declared goods. Though tax at 12.5% is applicable under Sl.No. 23 of the Sixth Schedule to the Act in respect of complete works contract involving transfer of property in goods, an exception is provided in section 4(1) (C) of the KVAT Act itself, that in respect of declared goods involved in the execution of the works contract, the rate of tax shall be as provided in Section 14 of the CST Act at 4%. Then relying of Section 7 of the Act It was held that, steel and steel products used as raw material bythe petitioners are incorporated into their civil works or other works contract in the same form except that the same may be fashioned to suit the requirement, before the same merge into the works whi....
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....sed for reinforcement of cement concrete and therefore when this structure is incorporated into the building, the time at which there is a transfer of property, the iron and steel rods of various dimendions are not directly transferred to the building as such, but as skeleton structures in roof, columns, beams, structures. Such skeleton structures is not a declared goods under Section 14 of the Act and therefore, the levy of tax under item No. 23 of the Sixth ?Schedule of the Act is valid and cannot be found fault with at 12.5% she also contended in a wprks contract when advance amount is paid, it is towards the sale of property which is involved in the execution of the works contract and, therefore, the said amount has to be included in the total turnover as provided in the explanation and liable to pay tax and the learned single Judge was not justified in holding otherwise and declaring the said provisions as unconstitutional to this effect. 15. Per contra, the learned senior counsel appearing for the petitioner Sri Sarangan submitted that, in interpreting this provision one has to keep in mind the object with Sections 14 and 15 are enacted. The legislature wanted the goods me....
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.... invoking item No. 23 of the Sixth Schedule of the Value added Tax Act? Whether the explanation to Rule 3(1) of the KVAT Rule which provides that any advance paid to a contractor as part of the consideration of the goods involved in the execution of the works contract could be included in the "total turnover" in the month in which the execution of the works commences even before the goods are incorporated in the works? When the petitioner purchased M.S. plates/ sheets which are declared goods for use as a raw material when it was transformed into M.S.Section, at works site and before it was incorporated in the construction as bullet tanks, the levy of tax at the rate of 12.5%,treating as not a delared goods is valid? (W.P. Nos. 29046-48/2009? STATUTORY PROVISIONS 17. In order to answer these questions we have to look at the statutory provisions incorporated by the state Legislature under the Act. Section 3 of the KVAT Act reads as under:- "3. Levy of tax The tax shall be levied on every sale of goods in the State by a registered dealer or a dealer liable to be registered, in accordance with the provisions of this Act. The tax shall also be levied, and paid ....
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....y tax on the sale of goods specified in serial number 60 of the Third Schedule or any other goods on the maximum retail price reduced by an amount equal to the tax payable. Notwithstanding anything contained in Sub-section (1), a registered dealer shall be liable to pay tax on the sale of Cigrattes, cigars, gutkha and other manufactured tobacco, on the maximum retail price indicated on the label of the container or pack thereof, after reducing from such maximum retail price an amount equal to the tax payable to the dealer as the consideration for sale of such goods exceeds five hundered rupees or any other higher amount as may be notified by the Commissioner. Where tax in respect of his purchase of goods is collected in accordance is collected with sub-section(5),- • A registered dealer whose sale of such goods is not liable to tax under sub-section (5) shall be eligible for refund or adjustment of any amount of tax collected on his purchase, which is in excess of the tax payable on his turnover relating to sale of such goods, and the burden of proving that the tax has been collected and paid in accordance with the said sub-section shall be on the dealer; ....
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....rgoings and steels on any of the above categories; • steel meeting scrap in all forms including steel skull, turning and borings; • steel tubes, both welded and seamless, of all diameters and lengths, including tube fittings; • tin-plates, both hot dipped and electrolytic and tin free plates; • fish plate bars, bearing plate bars, crossing sleeper bars, fish plates, bearing plates, crossing sleepers and pressed steel sleepers,-- heavy and light crane rails; • wheels, tyres axcles and wheel sets; • wire rods and wires-rolled, drawn, galvanished, aluminized, tinned or coated such as by copper; • defectives, rejects, cuttings or end pieces of any of the above categories;" 20. Section 15 imposes restrictions and conditions in regard to tax on sale or purchase of declared goods within a State. Clause (a) of section 15 reads as under:- 15. Restrictions and conditions in regard to tax on sale or purchase of declared foods within a state.-Every sales- tax laws of a state shall, in so far as it imposes or authorises the imposition of a tax on the sale or purchase of declared goods, be subj....
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....ions in the Sales Tax Acts of the States which are discrepant with s. 15 (a) of the Central Sales Tax Act, but to modify them in accordance therewith, The law of the state is declared to be subject to the restrictions and conditions contained in the law made by parliament and the rate in the State Act would by protanto stand modified. The effect of Art. 286(3) is now brought out by the second proviso to s. 5(l. But this proviso is encted out of abundant caution and even without it the result was the same." 23. Therefore though the power of state legislature to impose of tax in respect tax is recognized, in so far as imposition of tax in respect of the goods declared by parliament by law to be of special importance, the state legislation has to yield to the Parliamentary Legislation. In view of Section 14of the CST Act, iron and steel is declared as goods of special importance. In other words it is a declared goods. Section 15(a) of the CST Act, imposes a restriction to tax declared goods, the tax declared goods within the state. Though the State Legislature has been vested with the power to impose tax on such declared goods, tax payable under that law in respect of any sale or p....
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....clearly it could not have been intended that the centre should have the power to tax with respect to works constructed in the States. Inview of the fact that the State Legislatures had given to the expression "sale of goods" in entry 48 a wider meaning than what it has in the Indian sale of Goods Act, that States with Sovereign powers have in recent times been enacting laws imposing tax on the use of materials in the construction of buildings and that such a power should more properly be lodged with the stated rather than the centre, the condtitution might have given and inclusive definition of "sale" in Entry 54 so as to cover the extended sense. But our duty is to interpret the law as we find it, and having anxiously considered the question, we are of opinion that there is no sale as such of materials used in a building contract, and that the Provincial Legis;atures had no competence to impose a tax thereon under Entry 48. ............It is possible that the parties might enter into distinct and separate contracts, one for the transfer of materials for money consideration, and the other for payment of remuneration for services and for work done. In such a case, there are reall....
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....chase of goods included a tax on the amount paid for the execution of works contract. It refers to a tax 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- clause (a) to (f) 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 slae or purchase of goods" wherever it occurs in the constitution so that it may include within its scope the transfer,....
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....ferred to in caluse (29-A) of Article 366, the sales tax law of a state which provides for levy of sales tax thereon will have to comply with the restrictions mentioned in section 15 of the Central Sales Tax, Act,1956. Clause (b) is an additional provision which empowers Parliament to impose and additional restrictions or conditions in regard to the levy of sales tax on transaction which will be deemed to be sales under Sub Clause (b) of Sub-Clause (e) or sub Clause (d) of clause (29-A) of article 366 of the constitution. We do not find much substance in the contention urged on behalf of the states that since sub-clause(b) of clause (3) of Article 286 of the constituition refers only to the transactions referred to in sub- clause (b), (c) and (d) of clause (29-A) of Article 366, the transactions referred to under those three sub- clause would not be subjected to any other restrictions set out in clause (1) or clause (2) or sub-clause (a) of clause (3) of Article 286 of the constitution. It may be that by virtue of sub-clause (b) of clause (3) of Article 286 it is open to Parliament to impose some other restrictions or conditions which are not generally applicable to all kinds of sa....
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.... to the peripheries of the social limits of that power and, perhaps, even of the constitutional limits of that power in dealing with unequals. In such class of cases 'Building-Activity' really relates to a basic subsistential necessity. It would be wise and appropriate for the state to consider whether the requisite ans appropriate classifications should not be made of such building- activity attendant with such social purposes for appropriate separate treatment. These of course matters for legislative concern and wisdom. 29. The said provision also came up for consideration before a constitution Bench of the Apex Court in the case of BUILDERS ASSOCIATION OF INDIA AND OTHERS VS UNION OF INDIA AND OTHERS REPORTED IN (1989) STC VOL. 73 PAGE 370. It was held as under:- "Before proceedings further it is necessary to understand what sub-clause (b) of clause 29-A of article 366 of the constitution means. Article 366 is the definition clause of the constitution means. Article 366 is the definition clause of the constitution. It says that in the Constitution unless the context otherwise requires, the expressions defined in that article have the meanings respectively assigned to them ....
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....(f) thereof wherever such transfer delivery or supply becomes subject to levy of sales tax. So construed the expression tax on the sale or purchase of goods in Entry 54 of the State List, therefore, includes a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract also. The tax leviable by virtue of sub-clause (b) of clause (29-A) of Article 366 of the constitution thus becomes subject to the same discipline to which any levy under Entry 54 of the state list is made subject to under the constitution. The position is the same when we look at Article 286 of the Constitution. Clause (1) of Article 286 says that no law of a state shall impose, or autorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place-(a) out-side the state; or (b) in the course of the import of the goods into, or export of the goods out of, the territory of India. Here again we have to read the expression a tax on the sale or purchase of goods found in article 286 as including the transfer of goods referred to in sub-clause (b) of clause (29-A) of Article 366 which is deemed to be a s....
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....ot take the other parts of Article 286 inapplicable to the transactions which are deemed to be sales under Article 366 (29A) of the Constitution. We are of the view that all transfers deliveried and supplies of goods referred to in clause (a) to (f) of clause (29-A) of Article 366 of the constitution are subject to the restrictions and conditions mentiones in clause(1)and, clause (2) and sub clause (a) of clause (3) of Article 286 of the Constitution and the transfers and deliveries that take place under sub-clauses (b).(c) and (d) of clause (29-A) of Article 366 of the constitution are subject to an additional restriction mentioned in sub-clause (b) od article 286(3) of the Constitution." 30.The Apex court in the case of GANNON DUNKERLEY & CO. AMD OTHERS VS. STATE OF RAJASTHAN AND OTHERS REPORTED IN (1993) STC VOL.88 PAGE 204, has held as under: MEASURE OF TAX On behalf of the contractors, it has been urged that under a law imposing a tax on the transfer of property in goods involved in the execution of a works contract under entry 54 of the state list read the Article 366(29-A) (b), the tax is imposed on the goods which are involved in the execution of a works cont....
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....ion of the goods in the works forms part of the contract relating to work and labour which is distinct from the contract for transfer of property in goods and, therefore, the cost of incorporation of the goods in the works cannot be made a part of the measure for levy of tax contemplated by Article 366(29-A) (b) Xxxxxxxx The value of the goods involved in the execution of a wrok contract will, therefore have to be determined by taking into account the value of the entire works contract and deducting therefrom the charges towards labour and services which would cover: • labour charges for execution of the works; • amount paid to the sub-contractor for labour and services; • charges for planning, designing and architects's fees; • charges for obtaining on hire or otherwise machinery and tools used for the execution of the works contract; • cost of consumables such as water, electricity fuel etc. used in the execution of the works contract the property in which is not transferred in the course of execution of works contract; and • cost of establishment of the contractor to the extent it is relatable to su....
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.... sugar mills and Khandsari units was upheld in Ganga Sugar Co. Ltd. V. State of U.P. and ors. [1980] 45 STC 36 (SC). In our opinion, therefore ,it would be permissible for the State Legislature to tax all the goods involved in the execution of a works contract at a uniform rate which may be different from the rates applicable to individual goods because the goods which are involved in the execution of the works contract when incorporated in the works can be classified into a separate category for the purpose of imposing the tax and a uniform rate may be prescribed for sale of such goods. The aforesaid discussion leads to the following conclusions:- In exercise of its legislative power to impose tax on sale or purchase of goods under Entry 54 of the State List read with article 399(29-A)(b), the state legislature, while imposing a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract is not competent to impose a tax on such a transfer (deemed sale ) which constitutes a sale in the course of inter-state trade of commerce or a sale outside the state or a sale in the course of import or export. The pro....
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....ound worthy of credence by the assessing authority the Legislature may prescribe a formula for deduction of cost of labour and services on the basis of a percentage of the value of the works contract but while doing so it has to be ensured that the amount deductible under such formula does not differ appreciably from the exoenses from labour and services that would be incurred in normal circumstances in respect of that particular type of work contract. It would be permissible for the Legislature to prescribe varying scales for deduction on account of cost of labour and services for various types of works contract. While fixing the rate of tax it is permissible to fix a uniform rate of tax for the various goods involved in the execution of the work contract which rate may be different from the rates of tax ficed in respect of sales or purchase of those goods as a separate article. 31. The supreme court in the case of M/s Larsen & Tourbo Limited & anr Vs. State of Karnataka Anr. (2013 65 VST 1), explaining sub clause of clause 29A of Article 366 of the Constitution has held as under: 60. It is important to ascertain the meaning of sub-clause (b) of Clause 29 A of Article 36....
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....he States have now been conferred with the power to tax indivisible contracts of works. This has been done by enlarging the scope of "tax on sale or purchase of goods" wherever it occurs in the constitution. Accordingly, the expression "tax on sale or purchase of goods" in Entry 54 of list II of seventh Schedule when read with the definition clause 29-A, includes a tax on transfer of property in goods whether as goods or in some other than goods involved in the execution of works contract. The taxable event is deemed sale 32. From the aforesaid judgements it is clear that, by virtue of the legal fiction introduced by Article 366 (29-A) (b) of the constitution there is a deemed sale of the goods which are involved in the execution of a works contract. The expression " in some other Form" in the bracket is of utmosr significance as by this expression the ordinary understanding of the term 'goods'has been enlarged by bringing within its fold goods in a form other than goods. Goods is some other from would thus mean goods which have ceased to be chattel or movables or merchandise and become attached or embeddes to earth . In other words goods which have by incorporation become part ....
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....posite contracts with one or more of the above categories Fourteen and one half percent Fourteen and one half percent Sixth Schedule exclusively deals with works contract and the rate of tax Sl. No. 1 to 22 is the description of different types of works contract and rate of tax payable is the same. Only in respect of Item 23, which is in the nature of residuary works contract, the rate prescribed is fourteen and one half percent. 34. Reliance is placed on two judgements of the Australian Court by the Revenue in support of their contentions. In the case of Builders Association Of India And others Reported In (1989) STC Vol. 73 Page 370, The apex court had no occasion to consider both the judgements i.e., in the case of Sydney Hydraulic and Central Engineering Co. Blackwood & Son,8 NSWSR 10,and M.R. Hornibrook (Pty.) Ltd. V. Federal Commissioner of taxation., [1939] 62 CLR 272, which reads as under: "It is useful to refer at this stage to the corresponding at this stage to the corresponding law in Australia. In Sydney Hydraulic and Central Engineering Co. Blackwood & Son,8 NSWSR 10, the supreme court of New South Wales held that the works contract entered ....
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.... and the nature of the ground into which it was to be driven, and therefore, each pile in a job might be different from every other pile in it in length When the sales tax authorities made an assessment in respect of the value of the piles, M.R. Hornibrook (pty.) Ltd. Contended that the said piles had no sale within the meaning of the sales Tax assessment Acts that the said piles were not a " manufacture" or "goods manufactured" within the meaning of the sales Tax assessment Acts, and that the said piles formed part of a bridge and were built on the job and were not article of commerce and were not procurable from any thied person and were not of a class of goods manufactured for sale by any person therefore the price of piles was not liable to payment of sales tax. Latham, C.J. with Whom Justice Rich and Justice Starke tax. Latham, C.J. with whom Justice Rich and Justice Starke agreed (Justice McTiernan dissenting) held as under: " Sec.3(4) of the Act, referred to in part above quoted was at the relevant time in the following form: For the purposes of this Act, a person shall be deemed to have sold goods, if ,in the performance of any contract under which he has received or is ent....
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....oce Tax Cases Vo.11 Page 715, where this court has held as under : 12. Section 5B of the Act is the charging provision. It says that notwithstanding anything contained in Aub-aection (1) or Sub-Section (3) or sub-section (3C) of Section 5, but subject to Sub-section (4) , (5) , (6) of section 5 of the Act, a dealer is liabel to tax on his taxable turnover of transfer of property in goods (whether as goods or in some other form) invoved in the execution of works contracts for eact year at the rates mentioned at column (3) of the Sixth Schedule. 13. Entry No. 6 of the Sixth schedule provides for civil works like construction of building, bridged, roads, etc. The rate of tax for the relevant assessment year in 8 percent. 14. It is not in dispute nor it can be disputed by both sides that a contract had been awarded to the petitioner for construction of a bridge. For that purpose the dealer/ contractor had been purchased iron and steel and has utilized the same for the purpose of the construction of the bridge. Iron and steel purchased by him are used not in the form as iron and steel but are used for the purpose of construction of a bridge. Therefore, the liability of the deal....
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....e of TRIIVENI STRUCTURALS LIMITED VS. COMMISSIONER, TRADE TAX, U.P. LUCKNOW reported in (2009) 20 VST 760 (All,), dealing with a case where after purchase of iron and steel, it was used in the manufacturing of structure, which were subsequently used in the execution of the works contract. The Assessing authority levied the tax on the value of the steel structure used in the execution of the works at the rate of 8 percent. Levy tax has been upheld by the authorities. In that context, it was held that when the Tribunal has recorded a categorical findings of fact, that the items which were used in the execution of the works contract were not the same which were purchased, then the said structure ceases to be a declared goods and is liable to be taxed under the State legislation. There is no quarrel with the aforesaid proposition. Therefore the question in each case is, whether after purchase of iron and steel, before it is incorporated into a building, bridge or any other structure in the course of execution of the works contract, has it been transformed altogether into another goods. If it is so, it ceases to be declared goods and taxable at the rate prescribed under the State Legisl....
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....side the state shall not exceed 5% of the sale or purchase price thereof and such tax shall not be levied at more than one stage." 44. With the introduction of VAT which provides for taxation at more than one stage, the aforesaid words are omitted by finance Act 2002. However the learned Single Judge did not notice this change in law while framing the question for consideration. 45. Karnataka Value Added Tax Rules 2005, for short, hereinafter referred to as 'Rules' provides for determination of turnover in Rule 3. Sube Rule (1) of Rule 3 reads as under:- "3. Determination of turnover.- (1) The total turnover of a dealer, for the purpose of the Act, shall be the aggregate of.- • The total amount paid or payable by the dealer as the consideration for the purchase of any of the goods in respect of which tax is leviable under sub-section (2) of section 3; • The total amount paid or payable to the dealer as the consideration for the sale, supply or distribution of any goods where such sale, supply or distribution has taken place inside the State whether by the dealer himself of through his agent; • The total amount paid or payable to the d....
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....ectly or though another, on his own account or on account of others, whether for cash or for deferred payment of other valuable consideration, and includes the aggregate amount for which goods are purchased from a person not registered under the Act and the value of goods transferred or dispatched outside the state otherwise than by way of sale, and subject to such conditions and restriction as may be prescribed the amount for which goods are sold shall include any sums charged for anything done by the dealer in respect of the goods sold at the time of or before the delivery thereof." The explanation reads as under: "Explanation.- The value of the goods transferred or dispatched outside the state otherwise than by way of sale, shall be the amount for which the goods are ordinarily sold by the dealer where the dealer does not ordinarily sells the goods." 49. From the aforesaid definition it is clear that turnover means the aggregate amount for which goods are sold or distributed or delivered of otherwise disposed of in any of the ways referred to in clause (29) by a dealer.Therefore unless there is a sale of the goods, the amount realized by way of such sale cannot form ....
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....paid to the contractor to take steps to execute the work. On the date of amount is paid, the contractor neither transfers title in the property nor delivers possession nor incorporates any goods in the work. Therefore the question of treating the advance amount paid as part of consideration for transfer of property in goods would not become turnover and therefore the explanation added to Rule 3 with the object of levying sales tax on advance receipt runs counter to the aforesaid statutory provisions as well as the constitutional provisions. Therefore the learned Singlr Judge was justified in holding that the explanation is uncondtitutional. Therefore no fault could be found in the said order of the learned Single Judge. POINT NO.3 54. In order to answer the said question, it is necessary to find out that after purchase of MS plates and sheets, before it was incorporated, what are the activity carried out by the assessee at the time of incorporation and in what form the MS sheets were embedded to the earth. 55.Learned senior counsel Today, has given us the written note explaining the activity that the assessee has undertaken from the time MS sheets were purchased till the t....
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....e petitioner has taken the Central Excise Registration. Excise is payable on the process/ fabrication of sections and pipe spools at the time of clearance. It is called a mounded vessel because it has a shape of mound which includes the civil activities like excavation, making RCC retaining wall, drainage system and then cover up by sand covered with stones and bricks pitching keeping open only the inlets and outlets of the vessel. The fittings such as valves, instruments, fire fighting such as valves, instruments, fire fighting and security system are supplied directly to the party which will get fitted to the system/ package. These are directly sold to the party under Section 6(a) of the CST. The above work involved is total package for LPG mounded storage system. The total price is a lump sum price on Turnkey basis and break up of lump sum price mentioned in the contract is for interim payment purpose only and not break up of the work. However, the total contract price remains same for the execution of entire contract. After completing the above activities the total system is pre-commissioned and then commissioned and handed over for the operation. 57. The tax invoice is also....
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....ure" shall be constructed accordingly and shall include not only a person who employs hired labour in the production or manufactur of excisable goods. But also any person who engages in their production or manufacture on his own account;]" 59.Similarly, Section 2(29BA) of the Income Tax Act, 1961 defines what a manufacture as under:- " (29BA)"manufacture with its grammaticak variations, means a change in a non-living physical object or article or thing.- • resulting in transformation of the object of things into a new and distinct object or article or thing having a different name, charater and use; or • bringing into existence of a new and distinct object or article with a different chemical composition or integral structure;] 60. The work undertaken by the petitioner before incorporation of the steel plates falls within the definition of "manufacture" under both the enactments. In other words, the steel plates before it was incorporated has undergone the process of manufacture and ceased to tbe the steel plates and it has been taken the form of either section or bullet tank. Therefore, the value of the steel plates at the time of acquisition is ....