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TMI Blog2010 (7) TMI 920X X X X Extracts X X X X X X X X Extracts X X X X ..... is office outside U.P. for the purposes of execution of works contracts in U.P. The assessing authority vide order dated September 30, 1999 imposed tax of Rs. 10,87,479 and Rs. 7,44,745, respectively by including the value of material so transferred from its office outside U.P. in the taxable turnover. On appeal before the Deputy Commissioner of Appeals, the matter was remanded to the assessing officer. The order of remand passed by the first appellate authority was challenged by the assessee as well as the Revenue before the Trade Tax Tribunal in second appeals. The Tribunal vide order dated September 6, 2002, considerably reduced the tax liability of the assessee holding that the value of goods used in the execution of works contract rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounts to movement of goods from one State to another and would be covered by section 3 of the Central Sales Tax Act. U.P. Trade Tax Act, 1948 not only levies tax on sale and purchase of the goods in U.P. but also on transfer of rights to use any goods which has been covered by the definition of "sale" as contained in section 2(h)(iv) of the Act. The aforesaid provision is reproduced hereinbelow for the sake of convenience: "2. Definitions.- . . (a) . . . (h) 'Sale', with its grammatical variations and cognate expressions, means any transfer of property in goods (otherwise than by way of a mortgage, hypothecation, charge or pledge) for cash or deferred payment or other valuable consideration, and includes- (i) . . . (iv) a tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a- (a) . . . (b) transfer referred to in clause (b) of sub-section (1),- (i) the amount representing the sales value of the goods covered by sections 3, 4 and 5 of the Central Sales Tax Act, 1956;" A plain and simple reading of the aforesaid provision reveals that every dealer is supposed to pay tax on the net turnover of the transfer of the goods involved in execution of the works contract but the amounts representing the sale value of the goods which are covered by sections 3, 4 and 5 of the Central Sales Tax Act, 1956 are deductable from the said turnover in determining the tax liability. Now the short question which arises for determination is as to whether the value of the goods received by stock transfer by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so no dispute that the goods received by way of stock transfer in U.P. from the office of the assessee situate outside U.P. have been used in the execution of the works contract and that such transaction has resulted in the movement of goods from one State to another. In Santosh and Company v. Commissioner of Trade Tax [1999] UPTC 823, his Lordship of this court held that the value of goods brought from outside U.P. and consumed in U.P. in works contract is deductable under section 3F(2)(b)(i) of the Act. In the said case the assessee-dealer was having his office in New Delhi and he had brought goods from Delhi and consumed them in execution of works contract at Dehradun in U.P. The court held, "admittedly, goods were brought from Delhi to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved in U.P. from outside by way of stock transfer and were utilised in the works contract. In view of the above discussion, I am of the opinion that the goods received by the assessee in U.P. by way of stock transfer from its branch outside U.P. and consumed for execution of a pre-existing works contract amounts to sale or purchase of goods in the course of inter-State trade or commerce which is covered under section 3 of the Central Sales Tax Act. The value of such goods is therefore liable to be deducted under section 3F(2)(b)(i) of the Act from the net turnover of the assessee. Accordingly, there is no error of law in the impugned order of the Tribunal. The question raised in these revisions is answered accordingly, in favour of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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