9911796707
TMI Blog1958 (4) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... the validity of certain provisions of the East Punjab General Sales Tax Act (East Punjab XLVI of 1948), hereinafter referred to as the Act, imposing a tax on the supply of materials in construction works treating it as a sale. It will be convenient at this stage to refer to the relevant provisions of the Act. Section 2(c) defines "contract" as meaning, "Any agreement for carrying out for cash or deferred payment or other valuable consideration- (i) the construction, fitting out, improvement, or repair of any building, road, bridge or other immovable property; or (ii) the installation or repair of any machinery affixed to a building or other immovable property......." "Dealer" is defined in section 2(d) as any person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Authority, Jullundur District, issued a notice intimating the petitioners that as they had failed to apply for registration under section 7 of the Act assessment would be made under section 18, sub-section (2), for the periods commencing from April 1, 1955, onwards, and calling upon them to produce their account books and attend the hearing on February 16, 1957. Thereupon, the petitioners filed the present petition under Article 32 of the Constitution challenging the legality of the assessment proceedings, the main ground of attack being that the legislation of the Province of Punjab had, under Entry 48 in List II of Schedule VII to the Government of India Act, 1935, no power to impose tax on the supply of materials in construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the tender of the petitioners dated December 15, 1956, the Deputy Chief Engineer stated: "The above tender was accepted by me on behalf of the President of India for a lump sum of Rs. 9,74,961." How this amount is made up is given in Annexure E to the reply statement. It will be seen therefrom that the petitioners were to construct nine blocks, and the amounts are worked out treating each of the blocks as one unit, and the figures are totalled up. It is impossible on this evidence to hold that there was any agreement for sale of the materials as such by the petitioners to the Government. For the respondents reliance was placed on the rules appearing in the printed General Conditions of Contracts issued by the Government. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urplus materials remaining after the completion of the work must be held to have been re-sold by the Government to the contractor, and that is not contended for. In Tripp v. Armitage [1839] 4 M. & W. 687; 150 E.R. 1597, 1603., a builder who had been engaged to construct a hotel became insolvent, and dispute arose between the assignees in bankruptcy and the proprietors of the hotel as to the title to certain wooden sash-frames which had been delivered by the insolvent on the premises of the hotel and had been approved by the clerk and returned to the insolvent for the purpose of being affixed. The contention on behalf of the proprietors was that the goods having been approved by their surveyor, they must be held to have been appropriated to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting what is a lump sum contract for construction of buildings into a contract for the sale of materials used therein. It must therefore be held following the decision in Gannon Dunkerley & Co. v. State of Madras [1958] 9 S.T.C. 353., that there has been no sale of the materials used by the petitioners in their constructions, and that no tax could be levied thereon. Counsel for the petitioners raised two other contentions, but they are unsubstantial and may be shortly disposed of. One was that in the definition of "turnover" in section 2(j), clause (ii), which is what is applicable to the present case, there is no reference to sale of goods, and that, accordingly, even if Entry 48 in List II is to be interpreted in a wide sense, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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