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2022 (4) TMI 928 - HC - VAT and Sales TaxWorks contract service - zero rated supply - deemed sale or not - consideration money of works order or simply works contract is exempted from tax in view of section 21 A of West Bengal VAT Act and schedule AA or not - whether respective purchase orders and works order be taken as a sale or as a work order or the both orders should be dealt separately subject-wise, or not - HELD THAT:- The entire case of the petitioner rests upon the interpretation of the various provisions of the Act. To put the case of the petitioner in simple terms is that the nature of transaction done by the petitioner was held to be a works contract and deemed to be a sale. If the works contract is deemed to be a sale, then it should fall within the definition of sale as defined under Section 2(39) of the Act and if it is held to be a sale, the same having been affected to SEZs, has to be treated as zero rated in terms of Section 21 A of the Act as the nature of activity done by the petitioner under the said contract falls within Serial No. 04 in Schedule AA to the Act. Section 2(39) uses the expression “includes”. But what has been brought within the inclusive definition of sales or the types of transactions enumerated in Clauses (a) to (e) above. This becomes clear on reading the provision further i.e. after Clause (e) which uses the words “and such”. By use of the words “and such” would mean that such of the transfers, delivery of goods, transfer of right to use goods, supply or service or supply of goods, as mentioned in Clauses (a) to (e) alone can be treated to be the inclusive part of the definition of “sale” as defined under Section 2(39) of the Act. It is those 5 categories of transactions having been held to be deemed to be a sale and therefore, the question of giving an expansive meaning to the definition of “sale” merely because the word “deemed” is used is an incorrect manner of interpretation of the provision. The liability to pay tax in respect of a works contact is under Section 14 of the Act and Sub-Section (1) of Section 14 commences with a non-obstante clause stating that notwithstanding anything contained elsewhere in the Act, any transfer of property in goods whether as goods or in some other form involved in the execution of works contract in West Bengal shall be deemed to be a sale of those goods by the person making a transfer and the purchaser of those goods by the person to whom such transfer is made. Sub-Section (2) of Section 14 makes the dealer liable to pay tax under Section 15 of the Act which is a liability of a casual dealer to pay tax whereas the charging section for a sale “simpliciter” as defined under Section 2(39) are Section 16 and 16A of the Act - There is a conspicuous omission to include “deemed sale” which is found in Section 14 of the Act. Therefore, the benefit of the transaction to be treated as zero rated is mandatorily required to be a sale “simpliciter” to fall within the five categories enumerated in the definition of “sale” as defined under Section 2(39) of the Act. The purpose of bringing transaction which are works contract exigible to tax the deeming provision was inserted. A deemed sale cannot be interpreted to be a sale “simpliciter” unless the definition of “sale” in that particular statute provides for. Therefore, to contend that merely because a deemed sale is not included in the illustrative list it cannot be taken out of the purview of the definition of “sale” is an argument which is unacceptable. Thus, the petitioner has not been made out any grounds to interfere with the order of the tribunal - petition dismissed.
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