TMI Blog1996 (11) TMI 448X X X X Extracts X X X X X X X X Extracts X X X X ..... rmit the petitioner to pay compounded rate of tax under section 7-C of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as "the Act") with effect from April 1, 1997. 2. Thiru K.J. Chandran, Senior Counsel for the petitioner, contended as follows: The petitioner is engaged in executing turnkey jobs mostly connected to water supply schemes in Tamil Nadu. The said activity involves systematic planning, designing, manufacture of PSC pipes, supply at the sites of work, excavation, laying of pipes, joining, testing, including refilling of trenches, other connected civil works and commissioning of pipe lines apart from maintenance of 6 to 12 months and handing over to the clients or the departments concerned. 3.. The pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per section 3-B of the Act from April, 1997 till such time specific permission to pay tax under section 7-C of the Act is granted. On June 20, 1997, relying on the decision of the Allahabad High Court in Purolator India Ltd. v. State of U.P. reported in [1997] 105 STC 373 wherein it was held that civil contracts would include installation of the waste water treatment plant and construction of the sewage treatment plant and in "Engineers Enterprises v. Deputy Commissioner (Executive), Sales Tax reported in [1997] 105 STC 378 wherein construction of "washable apron" was held to be falling under civil contract which was approved by the Supreme Court on March 26, 1997 as reported in Commissioner of Sales Tax v. Engineers Enterprises [1997] 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner under the Act. It is pertinent to note that even the explanation to section 7-C specifically excludes only repair, maintenance, improvement, etc., made on an existing structure and not otherwise. 7.. Thus, the petitioner should be permitted to pay composition of tax under section 7-C of the Act with effect from April 1, 1997. 8.. Thiru G. Balraj, the learned Government Pleader, contended as follows: For the purpose of section 7-C(1) of the Act, "civil works contract" means civil works construction of (1) new building, (2) bridge, (3) road, (4) runway, (5) dam or canal. The works contract done by the petitioner for laying and joining pipes for distribution of water will not fall under "civil works contract" as defined in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng and testing of pipe lines and refilling of trenches, apart from commissioning so as to successfully ensure that water reaches the desired destination in the execution of the works contract. The point for decision is whether civil works contract is to be restricted to the new constructions mentioned in explanation to section 7-C of the Act which reads as follows: "Explanation.-For the purpose of this section 'civil works contract' means civil works of construction of new building, bridge, road, runway, dam or canal including any lining, tiling, painting or decorating which is an inherent part of the new construction; but shall not include any repair, maintenance, improvement or upgradation of such civil work by means of fixing and layin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g supply and laying of PSC pipes in an indivisible works contract from the scheme of composition contemplated under section 7-C of the Act. Definitely, the works contract executed by the petitioner is complex in nature. Thus, the new construction of water supply schemes as well as sewage schemes, if any, involving supply and laying of pipes executed by the petitioner in indivisible works contract have to be classified as "civil works contract" only for the purpose of payment of tax at compounded rate under section 7-C of the Act. 11.. In the above circumstances, as prayed for, the notice of the assessing authority in TNGST/0720064/97-98 dated September 26, 1997 is quashed and the assessing authority is directed to grant permission to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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