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TMI Blog2017 (2) TMI 958X X X X Extracts X X X X X X X X Extracts X X X X ..... ontractor, for being utilized for the purposes of construction to be raised for the assessee. According to the assessee, transfer of such goods did not amount to sale, as the goods upon which concessional tax was paid had been utilized for the benefit of government corporation only. The assessing authority, however, treated the transfer of goods by the department to the contractor as sale, and consequently, invoked the provisions of sub-section (2) of section 3G, and ultimately, an order was passed under sub-section 3G(3) of the Act. This order has been challenged by filing departmental appeals, which have failed, giving rise to filing of the present revision. 4. Sri N.C. Gupta, learned counsel for the revisionist contends that since goods have been utilized for the purposes of the government corporation, which was entitled to the protection under section 3G(1) of the Act, as such, liability of additional tax raised upon the assessee is bad in law. It is stated that the mere adjustment in the accounts, as per the terms of the agreement, of the value of goods did not amount to sale, and therefore, sub-section (2) and (3) of section 3G could not be invoked. In support of such conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e an act of 'sale', so as to bring it within the clutches of sub-section (2) of section 3G or not? 7. The judgments which have been relied upon by learned counsel for the revisionist essentially follows the reasoning given in M/s Oil and Natural Gas Commission (supra), which distinguishes the earlier judgment delivered by the Apex Court in M/s N.M. Goel & Co. (supra) on the ground that there is no completed transaction of sale involved in such contract. Para 15 of the judgment in M/s Oil and Natural Gas Commission (supra), which is relied upon, reads as under:- "15. Learned Standing Counsel, on the other hand, has placed reliance on the decision of the Supreme Court in M/s N.M. Goel & Company v. Sales Tax Officer, 1990 UPTC 865 (SC): 1988 STI Vol. 17-140, and on the basis of the said decision contended that the transaction made by the assessee amounts to sale and was exigible to sales tax. Learned counsel for the assessee contended that the ratio laid down in M/s N.M. Goel & Company (supra) is not applicable as it was a case of M.P. Entry Tax Act. It has been further stated that Clause 10 of the contract in the case of M/S N.M. Goel & Company (supra) clearly establishes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 of the judgment, which reads as under:- "Clause 10. If the specification or Schedule of terms provides for the use of any special description of materials to be supplied from Engineer-in-charge's Stores, or if it is required that the Contractor shall use certain stores to be provided by the Engineer-in-charge as shown in the Schedule of materials hereto annexed, the contractor shall be bound to procure and shall be supplied such material and stores as are from time to time required to be used by him for the purposes of the contract only, and the value of the full quantity of materials and stores to supply at the rates specified in the said Schedule of materials may be set off or deducted from any sums then due or thereafter to become due to the contractor under the contract or otherwise, or against or from the Security deposit, or the proceeds or sale thereof if the same is held in Government securities, the same or a sufficient portion thereof being in this case sold for the purpose. All materials so supplied to the contractor shall remain the absolute property of Government and shall not be removed on any account from the site of the work, and shall be at all times open ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re materials. But in order to ensure that quality materials are procured, the PWD undertook to supply such materials and stores as from time to time required by the contractor to be used for the purpose of performing the contract only. The value of such quantity of materials and stores so supplied was specified at a rate and got set off or deducted from any sum due or to become due thereafter to the contractor. Mr. Virmani, appearing for the appellant submitted before us that in the instant case, there was no such independent and separate sale. But we are unable to accept. Though, in a transaction of this type there is no inherent sale; a sale inheres from the transaction. Clause (10) read in the proper light indicates that position." 10. Similar view was reiterated by a subsequent bench of the Apex Court in Rashtriya Ispat Nigam Ltd. (supra). In Karya Palak Engineer, CPWD, Bikaner (supra) again the Hon'ble Supreme Court examined a similar situation wherein pursuant to a contract, the goods obtained on concessional tax had been transferred to the contractor for being utilized for the benefit of government entity. A defence was setup before the Apex Court that the transfer in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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