TaxTMI 
TaxTMI 
TaxTMI 
2016 (9) TMI 1249
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....al ultimately vide order dated 12.11.2014 for the reasons recorded in the order, dismissed the appeal. Under circumstances, the present petitions before this Court. 3. Petitioner - revenue has formulated the questions of law in the present petitions as under: (a) In the facts and circumstances of the case, whether the Karnataka Appellate Tribunal is justified in holding that the contract turnover relating to iron and steel has to be construed as declared goods employed in the execution of works contract attracting levy of tax at 4%? (b) In the facts and circumstances of the case, whether the Tribunal is justified in directing the assessing authority to bifurcate the turnovers of Iron and Steel transferred in the same form and transferred in other form? (c) In the facts and circumstances of the case, whether the Karnataka Appellate Tribunal is right in holding that the turnover of iron and steel is transferred in the same form or in different forms? 4. We have heard Mr. T.K. Vedamurthy, learned counsel appearing for the petitioner - revenue. 5. The perusal of impugned judgment of the Tribunal shows that Tribunal while considering the matter as to whether duty is leviable on....
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.... as per law, and in the light of the law laid down by the Division Bench of the Hon'ble High Court of Karnataka, mentioned Supra at Para-15, after providing an opportunity to the appellant of being heard. Hence, on the facts and circumstances and law, we answer to Point No.(1) partly in the affirmative." 6. The above referred record shows that the Tribunal for all purpose has relied upon and followed the decision of Division Bench of this Court in STR P No.209/2013 and allied matters decided vide order dated 10.12.2013. 7. When we further enquired the learned Government Advocate, as to whether such view taken by the Division Bench was carried before the Apex Court and if yes, the outcome thereof. He fairly brought to our notice that an appeal was preferred by the State against the aforesaid view taken by the Division Bench of this Court, which is considered by the Tribunal being SL P No.18646-19177/2015 and the said appeal of the Stat e has been dismissed together with the group of Civil Appeal No.4149/2007 and allied matters decided by the Apex Court vide its decision dated 11.08.2016. 8. We may for ready reference reproduce the view taken by the Apex Court in the above referre....
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.... the Constitution it is difficult to agree with the contention of the States that the properties that are transferred to the owner in the execution of a works contract are not the goods involved in the execution of the works contract, but a conglomerate, that is the entire building that is actually constructed. After the 46th Amendment it is not possible to accede to the plea of the States that what is transferred in a works contract is the right in the immovable property. The 46th Amendment does no more than making it possible for the States to levy sales tax on the price of goods and materials used in works contracts as if there was a sale of such goods and materials. We are surprised at the attitude of the States which have put forward the plea that on the passing of the 46th Amendment the Constitution had conferred on the States a larger freedom than what they had before in regard to their power to levy sales tax under entry 54 of the State List. The 46th Amendment does no more than making it possible for the States to levy sales tax on the price of goods and materials used in works contracts as if there was a sale of such goods and materials. We do not accept the argument ....
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....of the State under Entry 54 in State List in regard to the system of levy, rates and other incidents of tax. Such a law may be in relation to (a) goods declared by Parliament by law to be of special importance in inter- State trade or commerce, or (b) to taxes of the nature referred to in sub-clauses (b), (c) and (d) of clause (29- A) of Article 366. When such a law is enacted by Parliament the legislative power of the States under Entry 54 in State List has to be exercised subject to the restrictions and conditions specified in that law. In exercise of the power conferred by Article 286(3) (a) Parliament has enacted Sections 14 and 15 of the Central Sales Tax Act, 1956. No law has, however, been made by Parliament in exercise of its power under Article 286(3)(b). For the same reasons Sections 14 and 15 of the Central Sales Tax Act would also be applicable to the deemed sales resulting from transfer of property in goods involved in the execution of a works contract and the legislative power under Entry 54 in State List will have to be exercised subject to the restrictions and conditions prescribed in the said provisions in respect of goods that have been declared to be of spe....
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....sser diameters are placed and the intersections between the distribution bars/rods and main reinforcement bars/rods are tied together with binding wire. The tying is not for the purposes of fabrication but is to see that the iron bars or rods are not displaced during the course of concreting from the assigned positions as per the drawings. Welding of longitudinal main bars and transverse distribution bars is not done. In fact, welding is contra-indicated because it imparts too much rigidity to the reinforcement which hampers the capacity of the roof structure to oscillate or bend to compensate varying loads on the structure besides welding reduces the cross section of the bars/ rods weakening their tensile strength. The reinforcements are placed and tied together in appropriate locations in accordance with the detailed principles and drawings found in standard bar bending schedules which lay down the exact parameters of interspaces between bars/ rods, the required diameters of the steel reinforcement bars/ rods and contain the required engineering drawings for placement of bars in a particular manner. The placement of reinforcement bars/ rods for different structures is done under ....
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....r shear nor bending moment is maximum." The above specification which are standard for all civil construction works also confirms the correctness of the findings recorded by us supra. Welding of bars/ rods reduces their cross section and to that extent decreases the tensile strength of the reinforcement bars/ rods defeating the very purpose of steel reinforcement in cement concrete. When bars/ rods are just joined together loosely by the use of binding wires, the elasticity of the steel bar/ rod is in no way hampered and each reinforcement bar/ rod acts independently. By the combined action of the main reinforcement bars/ rods and the distribution bars/ rods, the reinforced cement structures like roofs act as a rigid diaphragm whose elements displace equally in the direction of the applied in-plane loads. From the above discussion it is clear that largely in building construction works, no pre-fabrication of any steel structure is done before embedding them in cement concrete mixture to form reinforced cement concrete structures . The findings of the lower authorities to the contrary effect in the cases on hand are entirely opposed to facts. The only process to which the steel ....
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....y become separately taxable goods or entities for purposes of sales tax. Where commercial goods, without change of their identity as such goods, are merely subjected to some processing or finishing or are merely joined together, they may remain commercially the goods which cannot be taxed again, in a series of sales, so long as they retain their identity as goods of a particular type." [paras 9 and 10] 17. 17. Given the fact situation in these appeals, it is obvious that paragraph 10 of this judgment squarely covers the case against the State, where, commercial goods without change of their identity as such, are merely subject to some processing or finishing, or are merely joined together, and therefore remain commercially the same goods which cannot be taxed again, given the rigor of Section 15 of the Central Sales Tax Act. We fail to see how the aforesaid judgment can further carry the case of the revenue. 18. We may note that in Civil Appeal No.4318 of 2007, Larsen & Toubro Ltd. v. State of Karnataka & Another , the Appellate Tribunal had passed an order dated 11.1.2002 in which it decided the case against the assessee on the ground that since the iron and steel products wen....