Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2015 (6) TMI 1043

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... sale’ all such events of transfer, delivery or supply of goods by one person to other person in any one of the above ways under sub-clauses (a) to (f) would be a ‘sale’. Various clauses of agreement shows that the said goods were supplied to the contractors on a fixed rate, and were to be consumed in the work as per approval and then the deductions of their sale price were to be made. Thus, it is clear that the above event of supply of specified goods were clearly covered under sub-clauses (b) and (d) of clause (m) of Section 2 of the Act, 1983 and were ‘sale’ within the meaning of such clauses. As we have already held that, there was transfer of goods involved in the execution of works contract with the transfer of right to use the goo .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... agreements between the Petitioner and the contractors, cement, steel and explosives were to be supplied by the Petitioner and the cost of these materials were to be deducted from the approved bill amount(s) of the contractors at the rate already fixed by the Petitioner. 3. On the above factual aspects, an assessment was made by the Deputy Commissioner of Commercial Tax Division, Government of Sikkim, for the period in between 1998-1999 to 2004-2005 and an Assessment Order was passed under Section 13 of the Sikkim Sales Tax Act, 1983 (hereinafter referred to as the Act, 1983 ). The Deputy Commissioner held that in fact the transfer of above goods by the Petitioner to the contractors vide their respective agreements was a sale under Sec .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... , has opposed these arguments and supported the two orders passed by the statutory authorities. He mainly contended that it was a case of transfer of goods on the fixed price under the particular agreements with the transfer of the right to use them and thus was sale within the meaning of Section 2(m) (b) and (d) of the Act, 1983. He relied on the decisions of Aggarwal Brothers vs. State of Haryana and Another : (1999) 9 SCC 182 and 20th Century Finance Corpn. Ltd. and Another vs. State of Maharashtra : (2000) 6 SCC 12. 6. We have heard counsel for the parties. 7. Section 2(m) of the Act, 1983 defines sale with its grammatical variations and cognate expressions means any transfer of property in goods by one person to another for c .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... on the transfer of the right to use goods. Various sub-clauses of Section 2(m) of the Act, 1983 are reproduction of clause (29-A) of Article 366, which permits the imposition of tax on the above events. 9. For the purpose of instant case, sub-clause (b) and (d) of clause (m) of Section 2 of the Act, 1983 are relevant. Sub-clause (b) talks about the transfer of goods involved in the execution of works contract and sub-clause (d) talks about the transfer of the right to use any goods for any purpose for cash, deferred payment or other valuable consideration. This clearly means that in addition to the main definition of sale all such events of transfer, delivery or supply of goods by one person to other person in any one of the above w .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... detonators to the contractors as per relevant clauses of the agreement. For example, we may quote clause 93.4.v of one of the agreement(s), which deals with cement: - CEMENT a) Cement will be issued to the Contractor in bags as received from the suppliers or by weight at the rates specified in Annex-1 and will be consumed in Work as per mix-design approved by the Engineer. b) In case cement is issued by bags in numbers and consumed by weight, an allowance of 3% (three percent) of the quantity of cement issued will be allowed to account for the difference between the quantity issued and that consumed. Alternatively, if cement is issued by the Corporation by weight and also consumed by weight, an allowance of 1% (one percent) of th .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ontractors who used it in the course of construction of building. They were served with notices under the Haryana General Sales Tax Act, 1973 requiring them to pay sales tax on such hire charges and assessment orders were then so made. When the matter came up before Supreme Court it was held that such transfer of a right to use goods for consideration was deemed to be a sale, which was defined under the said Act in similar terms. It was held that the provisions expressly speak of transfer of right to use goods and not of transfer of goods . There was, therefore, no merit in the submission that to be deemed sale within the meaning of the above provision of the said Act there must be a legal transfer of goods or that the transaction must b .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates