9911796707
TMI Blog2016 (12) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... T.K. Vedamurthy, learned Additional Government Advocate appearing for petitioner. 3. The contentions raised on behalf of the petitioner was that, since various items for the works contract, viz., bitumen, sand and jelly, etc., were used for the execution of works contract. The amount of works contract would fall in the residuary category for tax at 12.5% since all such items are already utilized for execution of the works contract. He submitted that, so far as steel material is concerned, the First Appellate Authority assessed in the ratio of 32.5%. But for the rest of the items, duty was held to be chargeable a t 12.5%. The Tribunal found that the amendment inserted is with effect from 1.4.2006 and therefore, for the period of 2005 and 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der dated 2.8.2006 clarified the same. Subsequently, on further clarification sought for by the appellant, the ACAR by its order dated 7.12.2006 further clarified that if the iron and steel is used in the same form in the course of execution of the works contract, it is liable to tax at 4% as per Section 4(1)(c) of the Act. However, the Commissioner feels that clarification made by the ACAR is prejudicial to the interest of the revenue, insofar as clarification regarding the rate of tax on works contract prior to 31.3.2006. Accordingly issued notice and reviewed the order passed by the ACAR. 10. Section 3(1) of the Act provides for levy of tax on every sale of goods. Section 4 prescribes the rate of tax. Neither Section 3 nor Section 4 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DB) , disposed of on 12.3.2010 and contended that the amendment is only a prospective operation and cannot be claimed retrospectively. Admittedly, prior to 1.4.2006 insertion of clause (c) to Section 4(1), the rate o f tax was not prescribed in respect of transfer of the property in goods (whether as goods or in any other form) involved in the execution of works contract. Hence, the tax has to be levied as per Section 3(1) of the Act. The sale under the works contract is a deemed sale of transfer of the goods alone and it is not different from the normal sale. Hence, the tax has to be levied on the price of the goods and material used in the works contract as if there was a sale of goods and materials. The property in the goods used in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks contract will have to be considered separately for the purpose of chargeability. Of course, the benefit is already gr anted for the Iron and Steel by the First Appellate Authority to the extent of 32.5% of the total amount of the purchase. For the cement, the Tribunal had found that it would be 12.5%, whereas, for jelly, it would be 4% and for bitumen, it would be 4%. The view taken by the Tribunal, more particularly, in the absence of any amendment in the statute book providing for separate chargeability of the works contract cannot be said to be erroneous. 7. Further, on the aspect of retention of the character of the item utilized in the works contract, the matter is also considered in the case of iron and steel as per the decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
