TMI Blog2009 (6) TMI 938X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the revisional authority in No. ZAC/I/DVG/SMR-11/08-09/T/MP/1099/08-09, dated January 31, 2009 and order dated October 20, 2008 in No. ZAC-IDVO-1 and 3/SMR/CR-09/08-09, in exercise of power under section 22A(1) of the Karnataka Sales Tax Act, 1957 (in short, the Act ) framing number of substantial questions of law in the appeals, urging various grounds in support of the same and requested to answer the same in favour of the appellants. Since in all these appeals, the questions of law framed are same, on the request made by the learned counsel for the parties, we have heard these appeals together and dispose of by this common judgment. Though number of substantial questions are framed in these appeals in view of the decision of the Supreme Court in the case of State of Andhra Pradesh v. Larsen Tourbo Ltd. reported in [2008] 17 VST 1 only the relevant questions which would arise for our consideration are extracted hereunder: (1) Whether the resale tax levied by the respondent under section 6B of the Act considering that the amounts paid by the appellant to the sub-contractor as representing turnover of deemed sale of goods is legally justified? (2) Whether th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of statutory provisions but the speech made by the mover of the Bill explaining the reason for the introduction of the Bill can certainly be referred to for the purpose of ascertaining the object, intent and purpose for which the legislation is being enacted to rectify the mistake of ambiguity in the provision in a statute. Further, both the learned counsel Sri Keshavamurthy and Sri R.V. Prasad for the appellants in these appeals have placed strong reliance upon the decision of the Supreme Court in the case of State of Andhra Pradesh v. Larsen Tourbo Ltd. reported in [2008] 17 VST 1 in support of legal contention that in view of article 366(29A)(b) of the Constitution of India, once the work is assigned by the contractor to sub-contractor, the only transfer of property in goods is by the sub-contractor(s), who is a registered dealer in this case and who claims to have paid taxes under the Act on the goods used for the execution of the works. Once the work is assigned by L T to its sub-contractor(s), L T ceases to execute the works contract in the sense contemplated by article 366(29A)(b) because property passes by accretion and there is no property in goods with the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... senting the budget for the year 2002-03, reads thus: 177. VAT entails multi-point levy of tax at all points of production and distribution. The second and subsequent dealers in the trade channel who are currently paying a nominal non-passable turnover tax of one per cent would have to pay tax under VAT which could be higher but collectable. As an intermediate measure and to prepare deals for a smooth transit to VAT, I propose to introduce a collectable resale tax of 1.5 per cent. Most of the commodities which are totally exempt from tax on their second and subsequent sales, however, are proposed to be exempt from this new levy. This collectable new levy should induce the entire trade to issue bills on all their sales . A careful reading of the above portion of the speech made by the Finance Minister of Karnataka State makes it clear that section 6B of the Act was inserted with a view to bring second or subsequent sale of goods under tax umbrella. The learned counsel for the appellants rightly relied upon the judgment referred to supra to construe the speech delivered by honourable Finance Minister as statute for the purpose of ascertaining the object and intentment of insert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t para 16 after interpreting section 47A of the Andhra Pradesh Value Added Tax Act, 2005 read with rule 17(1)(a) and (c) and article 366(29A)(b) of the Constitution of India, which reads thus: . . . Under section 4(7)(a) read with rule 17(1)(c), quoted above, where a VAT dealer awards any part of the contract to a sub-contractor, such sub-contractor shall issue a tax invoice to the contractor for the value of the goods at the time of incorporation in such subcontract. The tax charged in the invoice issued by the sub-contractor shall be accounted by him in his returns. Therefore, the scheme indicates that there is a 'deemed sale' by the dealer executing the work, i.e., the sub-contractor. It is only the sub-contractor who effects transfer of property in goods as no goods vests in the respondentcompany (contractor) so as to be the subject-matter of a retransfer. By virtue of article 366(29A)(b) of the Constitution once the work is assigned by the contractor (L T), the only transfer of property in goods is by the sub-contractor(s) who is a registered dealer in this case and who claims to have paid taxes under the Act on the goods involved in the execution of the works. O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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