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2015 (3) TMI 210 - HC - VAT and Sales TaxNature of the works contract - indivisible and composite works contract or not - Rejection of the application for grant of exemption under Rule 10A and 10B - laying, jointing etc. of pipes and commissioning of pipelines etc. - Held that:- On the declaration of law of the Hon'ble Supreme Court in Larsen and Toubro Limited and Anr. Vs. State of Karnataka and Anr., [2013 (9) TMI 853 - SUPREME COURT], and considering the reference made in Raheja Development's case(2005 (5) TMI 7 - Supreme Court), no interference is required to be made with the order of the Appellate Authority, dated 24.05.1997 under Section 84 of the Act of 1994. The Appellate Authority has, considering the entire case law on the subject, upheld the order passed by the Assessing Authority, that the works contract executed by the appellant-Company is a divisible contract, which is established by the work orders i.e. Annexures A-2 and A-3. The Assessing Authority had examined the work orders in holding that the works contract was divisible and had also rejected the application for exemption on the ground that the sale of prestressed cement concrete pipes falls within the definition of sale of goods under the Act. - In view of the alternative remedy available to the petitioner-Company, we are not inclined to reconsider and review the findings, based upon the terms of the agreement read along with the work orders. The legal proposition with regard to definition of 'works contract' in Article 366(29A)(b) of the Constitution of India, has been explained in the recent judgment in Larsen and Toubro Limited and Anr. Vs. State of Karnataka and Anr. For sustaining levy of tax on goods, deemed to have been sold in execution of a works contract, three conditions namely (i) there must be a works contract; (ii) goods should have been involved in execution of a works contract; and (iii) property in those goods must be transferred to a third party, either as goods or in some other form, have been amply clarified. A contract may involve both, a contract of work and labour, and a contract for sale. A transfer of property in goods under clause 29A(b) of Article 366, is deemed to be sale of goods involved in execution of a works contract by a person making transfer and purchase of those goods to a person, to whim such transfer is made. A single and indivisible contract has been brought on par with a contract containing two separate agreements, empowering the State to levy sales tax on value of material in execution of works contract. So far as the exemption is concerned, we do not find any error in the finding recorded by learned Single Judge, that the exemption Notification having been issued on 29.03.2001, will only apply prospectively from the year 2001-2002, and that the benefit of exemption can be availed by a firm only after issuance of the Notification dated 29.03.2001. The petitioner has challenged the Assessment Year 1999-2000, and therefore, the Notification was not applicable to the dispute involved in the matter. - No error of law in the judgment of learned Single Judge, dated 25.02.2002, dismissing all the writ petitions filed by the petitioner - Decided against assessee.
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