9911796707
TMI Blog2012 (7) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... t of works and materials, rate of tax is shown as 22.5 per cent. The A.O. found that the contract work is indivisible and that the rate of tax shall have to be levied as per section 4(c) of the KVAT Act on that rate on all the materials. The appellate authority confirmed the order of the A.O. and rejected the appeal of the assessee. The Tribunal set aside the order of the appellate authority and held that as per the terms of the contract, the price of the materials (cable wire) incorporated in the contract works, has been separately quoted. Hence, it becomes divisible deemed sale. Therefore, held that levy of uniform tax in respect of cable wire, is held to be bad in law. The State aggrieved by the said order, has filed this revision. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of law which are as follows (pages 237 and 238 in 88 STC): "The aforesaid discussion leads to the following conclusions: (1) In exercise of its legislative power to impose tax on sale or purchase of goods under entry 54 of the State List read with article 366(29A)(b), the State Legislature, while imposing a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract is not competent to impose a tax on such a transfer (deemed sale) which constitutes a sale in the course of inter-State trade or commerce or a sale outside the State or a sale in the course of import or export. (2) The provisions of sections 3, 4, 5 and sections 14 and 15 of the Central Sales Tax Act, 1956 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arges for labour and services which are required to be deducted from the value of the works contract would cover (i) labour charges for execution of the works, (ii) amount paid to a sub-contractor for labour and services, (iii) charges for obtaining on hire or otherwise machinery and tools used for execution of the works contract, (iv) charges for planning, designing and architect's fees, (v) cost of consumables used in the execution of the works contract, (vi) cost of establishment of the contractor to the extent it is relatable to supply of labour and services, (vii) other similar expenses relatable to supply of labour and services, and (viii) profit earned by the contractor to the extent it is relatable to supply of labour and servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olved in the execution of the works contract which rate may be different from the rates of tax fixed in respect of sales or purchase of those goods as a separate article. The Gannon Dunkerley's case [1993] 88 STC 204 (SC) was decided prior to amendment to article 366 of the Constitution of India which came into effect from 46th Amendment in the year 1983. Section 4(1)(c) of the KVAT Act was incorporated by amendment with effect from April 1, 2006 when the law specifically authorizes the State to levy uniform tax. It may not be within the competence of the taxing authorities to enter into contract to negate the effect of section 4(1)(c) of the KVAT Act. Section 4 is the charging section, which lays down different tax rates for the good ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
