TaxTMI 
TaxTMI 
2015 (6) TMI 1043
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....ing its Corporate Office at Faridabad, Haryana. The Petitioner had entered into an Agreement with the State Government of Sikkim for construction and operation of 510 MW capacity of Teesta Stage-V Hydroelectric Power Project. The construction of the project was started in November, 2000 and the project was fully commissioned on 10.04.2008. During the course of construction of the project, the Petitioner had awarded both civil and mechanical works of construction to various contractors. The contract works awarded in both the categories were composite contract including both value of materials as well as value of labour and other related services of like nature. 2. As per the agreements between the Petitioner and the contractors, cement, ste....
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.... Section 2(m) of the Act, 1983. The Petitioner, having paid the aforesaid amount, has challenged the above actions in this writ petition. 4. Mr. Upadhyaya, learned Senior Counsel appearing on behalf of the Petitioner has mainly contended that the supply of above goods by the Petitioner to the contractors was not a 'sale' within the meaning of Section 2 (m) of the Act, 1983. According to him it was a simple bailment, therefore, tax assessment was bad in law. He relied on the decision of State of A.P. and Another vs. Rashtriya Ispat Nigam Ltd. : (2002) 3 SCC 314. 5. On the other hand, Mr. J.B. Pradhan, learned Additional Advocate General appearing on behalf of State, has opposed these arguments and supported the two orders passed by the sta....
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....h, deferred payment or other valuable consideration; (f) the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service is for cash, deferred payment or other valuable consideration, does not include a mortgage or hypothecation of or a pledge on goods. 8. The above definition of 'sale' is inclusive and it appears that various sub-clauses of clause (m) of Section 2 are designed on clause (29-A) of Article 366 of the Constitution, which empowered the State Legislature to enact law imposing sales tax on the transfer of the right to use goods. Various sub-clauses of Section 2(m) of the A....
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....ere the goods are located and a written contract is entered into between the parties, the taxable event on such deemed sale would be the execution of the contract for the transfer of right to use goods. The Supreme Court held in paragraph 35, vide clause (e) that the transaction of transfer of right to use goods cannot be termed as contract of bailment as it is deemed sale within the meaning of the legal fiction engrafted in clause (29-A) (d) of Article 366 of the Constitution. 11. In the instant case various clauses of agreement(s) between the Petitioner and the contractors would show that the Petitioner had to supply cement, steel and explosive detonators to the contractors as per relevant clauses of the agreement. For example, we may qu....
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.... the agreement(s) would show that the said goods were supplied to the contractors on a fixed rate, as per Annex-1 to the agreement(s), and were to be consumed in the work as per approval and then the deductions of their sale price were to be made. Thus, it is clear that the above event of supply of specified goods were clearly covered under sub-clauses (b) and (d) of clause (m) of Section 2 of the Act, 1983 and were 'sale' within the meaning of such clauses. 13. In Aggarwal Brothers (supra), the question was as to whether the hiring in the said case was included within the meaning of deemed sale. The assessees hired shuttering to builders and contractors who used it in the course of construction of building. They were served with notices u....