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TMI Blog2013 (1) TMI 336X X X X Extracts X X X X X X X X Extracts X X X X ..... Crushed White Iodized Salt', the petitioner participated in the tender process, turned successful and got the order for supply of such salt under some specific terms and conditions, as per the agreement signed between the petitioners and the Government of Tripura. 4. Since the cases are similar in nature, as agreed to, by the learned counsel of both side, records of WP(C) 330/2010 is taken up, for deciding the issues in all the cases. To have a glimpse to the agreement we may reproduce here, as a reference, the clauses 1, 2 and 3 of the agreement which reads thus: "1. That the "IODISED SALT IMPORTER" shall have to place indents for wagons within 15(fifteen) days from the date of receipt of allotment from the Director, Food, Civil Supplie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 1. 2. 3. Central Stores, A.D. Nagar, Agartala. 6,000MT. Rs.600.00 P/Qtl. Dharmanagar (Including Chandrapur & Ganganagar Godowns) 3,600 M.T. Rs.555.00 P/Qtl. Udaipur 2,400 MT. Rs.610.00 P/Qtl. Total:- 12,000 MT. ------- 3. The Salt Importer shall get @ Rs.600.00 (Rupees Six Hundred Only) per quintal for supply of Super Fine Crushed White Iodised Salt in 1(One) K.G Poly Packet at Central Stores, A.D. Nagar, Agartala, @ Rs.555.00 (Rupees Five Hundred Fifty Five Only) per quintal for supply of Super Fine Crushed White Iodised Salt of 1(one) K.G. Poly packet at Dharmanagar (including Ganganagar & Chandrapur) and at Udaipur, @ Rs,610.00 (Rupees six Hundred Ten Only). The aforesaid rates inclusive of all costs as mentioned in Cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the judgment observed thus : "6. On a perusal of the clarification dated 28th July, 1997 of the Income Tax officer Ward No.1, Agartala quoted above, we find that the said Income Tax Officer has stated that after careful consideration of the contract executed by the appellant with the Food & Civil Supplies Department, Government of Tripura the Commissioner of Income Tax, NER, Shillong is of the view that the nature of the contract executed by the appellant is a contract for sale and that it fell within the clause 'b' of sub para (vi) of para 7 of the Board's Circular No.681 dated 8th March, 1994 and that no deduction of tax under Section 194C was required to be made from the payment towards execution of the contract. It is thus clear that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst supplies of iodised salt made under the contract in question. None of our observations will affect the tax liability of the appellant that may be payable by the appellant to the Income Tax authority directly under the provisions of the Income Tax Act, 1961. So far as the amounts already deducted by the respondents towards income tax are concerned, the same shall be deposited by the respondents in accordance with the Income Tax Act, 1961, and tax deduction certificates will be forthwith issued to the appellant by the respondents". A copy of the judgment is annexed as Annexure-2 to the writ petition which reflects the contents of letter dated 28.07.1997, considered by the Court in passing that judgment. The said letter reads thus : " No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transactions, where the assessee has outsourced certain work relating to fabrication or manufacturing of article or thing in accordance with the specifications given by the assessee. Circular No.681, dated 08-03-1994 of the Board clarifies in Para 7(vi) that the provisions of section 194C would not apply to contracts for sale of goods and further clarifies that where the property in the article or thing so fabricated passes from the fabricator-contractor to the assessee only after such article or thing is delivered to the assessee, such contract would be a contract for sale and so outside the purview of section 194C. However, in reply to question No.15 in Circular No.715, dated 8- 8-1995 on the subject of applicability of section 194C, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iate competent authority in the matter of deduction of Income Tax by source. It is submitted by learned counsel, Mr. Biswas referring to Section 119 of the Income Tax Act that the Board is the competent authority under the Act to issue circular in respect of exigibility of Income Tax on work contract and supply contract etc. and it is clear from the above circular that a contract for supply on sale does not come within the purview of Section 194C of the Income Tax Act. 10. Learned Addl. G.A., Mr. Chakraborty referring to Annexure-A to the counter-affidavit submitted that the contract for sale with the petitioners consists some other elements such as packing, bagging, carrying etc and so, it may be classified as a 'work contract' and there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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