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1961 (4) TMI 74 - SC - VAT and Sales TaxWhether the appellants in the two appeals are liable to pay sales tax on the value of the materials used by them in the execution of the works under the contract? Whether on the construction of the agreement dated December 19, 1953, it could be held that there was a sale by the appellants of the materials used in the construction works, apart from the execution of those works? Held that:- Appeal allowed. We are satisfied that the proceedings have at all stages gone on the footing that the liability of the, appellants arose under the contract and not otherwise. In that view, we must hold, following the decision in The State of Madras v. Gannon Dunkerley & Co. (Madras) Ltd. [1958 (4) TMI 42 - SUPREME COURT OF INDIA] that the proceedings taken by the respondents for imposing sales tax on the supplies of materials by the appellants, pursuant to the contract dated December 19, 1953, are illegal and must be quashed. In the result, the appeals are allowed and appropriate writs as prayed for by the appellants will be issued.
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