2024 (6) TMI 609

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....aja Nazirudeen, learned Additional Advocate- General and Mr.M.Venkateswaran, learned Special Government Pleader (Taxes), assisted by Mr.P.Haribabu, learned Government Advocate for the respondents. 2. The petitioner is challenging part of proviso to Section 3-B(2) of the Tamil Nadu General Sales Tax Act, 1959. 3. The petitioner is a contractor. It had assigned the work to a sub-contractor. Reliance is placed on Article 366(29-A) of the Constitution of India, which states that tax on the sale or purchase of goods 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. The petitioner had admittedly sub-contracted it to another person and that person to wh....

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....e of S.A.A.Ispahani Trust, 15, Nungambakkam High Road, Chennai-34 v. The Income Tax officer, T.D.S. Ward II (2), Chennai-34, reported in 2013 SCC OnLine Mad 1260 and submits that the liability of the contractor to pay the tax would still subsist, if the sub-contractor does not pay the tax. According to him, the said judgment is followed by the learned Single Judge of this Court in W.P.Nos.22212, 22215 and 22216 of 2019, dated 29.07.2019 (M/s.Sulochana Cotton Spinning Mills (P) Limited, rep. by S.Krishna Kumar, Managing Director, Palladam Road, Tirupur v. The Assistant Commissioner (CT), Tirupur (South) Assessment Circle, Tirupur). 8. Learned Additional Advocate-General submits that there would be a distinction between the total turnover ....

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....w of that, when the work is already assigned to its sub-contractor, which is registered, the sub-contractor is liable to pay the tax under the Act and it is the responsibility of the sub-contractor to include the same in his return. 14. The Apex Court, in the case of Larson & Toubro Limited (supra), has considered the pari materia provision under the Karnataka Sales Tax Act, 1957 and observed as under: "18. What is significant is that total amount paid or payable to the dealer as a consideration for "transfer of property in goods", which is involved in execution of the works contract, is to be treated as "total turnover". This Rule, thus, specifically restricts the total turnover in respect of those goods, alone, where the prope....