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2018 (5) TMI 278 - HC - VAT and Sales TaxWorks contract - Deduction of resale - it was alleged that the petitioner had sold the pipes and not plates and since pipe is a commodity different from plate, the petitioner is not entitled to deduction of resale as was allowed in the assessment proceedings - whether was there any contract for supply / sale of steel plates between the petitioner contractor and the Board and / or whether transaction of supply and sale of steel pipes used in execution of work contracts can be said to be sale within the definition of Section 2(28) of the Act or whether the same can be said to be resale as contended on behalf of the petitioner-contractor? Held that: - it cannot be said that there was any contract between the petitioner contractor and the Board for supply of steel plates. From the material on record, it appears that the petitioner had purchased the steel plates from M/s. Essar Steel Limited and M/s. Essar Steel Limited did not required tax from the petitioner as M/s. Essar Steel Limited was enjoying exemption under Section 49(2) of the Act. The steel plates converted into steel pipes after undergoing process by the job worker / third parties certainly results in emergence of a new and distinct commodity viz. steel pipes. The original plates does not remain the original plates. It becomes a steel pipes. Thus, in the circumstances, not only there is manufacture but also an activity which is something beyond manufacture and which brings a new product into existence and thereafter steel pipes are supplied, it amounts to "sale" within the definition of Section 2(28) of the Act. Merely because in the contract for laying down pipelines, a particular quality and / or thickness of the steel plates were agreed to be used and / or even the steel plates were required to be purchased from the particular manufacturer, it cannot be said that there was a contract for supply / sale of steel plates as contended on behalf of the petitioner. As such there is no contract at all for sale / supply of steel plates by the petitioner contractor and the Board. Tribunal has not committed any error in confirming the order passed by the Revisional Authority and holding that the petitioner company contractor is liable to pay tax under the Act on manufacture and supply of steel pipes. Petition dismissed - decided against petitioner.
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