TMI Blog2012 (7) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... hich lays down different tax rates for the goods mentioned in Schedules II to IV. In the case of Gannon Dunkerley [1992 (11) TMI 254 - SUPREME COURT OF INDIA] it is categorically held that the State can legislate the law to levy uniform tax. The argument that such levy of uniform tax would be discriminatory and would be in variation with the tax imposed on the particular product if it is not deemed sale under the contract works, is untenable. When the Legislature empowers the taxing authority to levy uniform tax by section 4(1)(c), it is impermissible for the assessee to contend that some of the items supplied in the contract works constitute divisible contract and it should attract less tax is untenable. In that view, the question of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the instant case as it is divisible contract and that for cable wires supplied in works contract, attracts lesser duty at four per cent. and not uniform rate at 12.5 per cent. is bad in law? The Tribunal has relied upon the decision of the Supreme Court in the case of Gannon Dunkerley Co. v. State of Rajasthan reported in [1993] 88 STC 204 (SC), wherein it was held that (page 213 in 88 STC): It is possible that the parties might enter into distinct and separate contracts, one for the transfer of materials for money consideration, and the other for payment of remuneration for services and for work done. In such a case, there are really two agreements, though there is a single instrument embodying them, and the power of the Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cle 366(29A)(b). (3) While defining the expression 'sale' in the sales tax legislation it is open to the State Legislature to fix the situs of a deemed sale resulting from a transfer falling within the ambit of article 366(29A)(b) but it is not permissible for the State Legislature to define the expression 'sale' in a way as to bring within the ambit of the taxing power a sale in the course of inter-State trade or commence, or a sale outside the State or a sale in the course of import and export. (4) The tax on transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract falling within the ambit of article 366(29A)(b) is leviable on the goods involved in the execu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produced by him are not found worthy of credence by the assessing authority the Legislature may prescribe a formula for deduction of cost of labour and services on the basis of a percentage of the value of the works contract but while doing so it has to be ensured that the amount deductible under such formula does not differ appreciably from the expenses for labour and services that would be incurred in normal circumstances in respect of that particular type of works contract. It would be permissible for the Legislature to prescribe varying scales for deduction on account of cost of labour and services for various types of works contract. (8) While fixing the rate of tax it is permissible to fix a uniform rate of tax for the various goo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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