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TMI Blog2018 (5) TMI 1865X X X X Extracts X X X X X X X X Extracts X X X X ..... 319, 19353 of 2014, 16455 to 16463, 24794 to 24799 of 2017, 1585, 1586, 1587, 1590, 1591, 1592, 1593, 1594, 1595, 1643, 3946, 3947, 3948, 3949, 3986, 4083, 4084, 4085, 4086 and 10504 of 2018 as learned counsel for the parties are agreed that the primary issue in all these petitions would be governed by the decision rendered in VATAP No. 32 of 2017, (M/s A.P. Processors, Faridabad Vs. The State of Haryana and others), decided today. The essential facts necessary for adjudication of these petitions are being extracted from CWP No. 20637 of 2013. 2. The petitioner company is engaged in the execution of job work in the State of Haryana on fabric, which comes from outside the State and the finished fabric is sent back after various processes ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Haryana and others, of even date, wherein after examining the factual matrix and the relevant case law on the point, it has been held that while determining the actual loss of chemicals, dyes and colours where the fabric or the textile undergoes various processes depends upon factual aspect which can be considered only by the Assessing Officer where parties can produce evidence in respect of their respective claims/contentions. Accordingly, therein, the matter has been remanded to the Assessing Officer to work out the details of quantity of chemicals, dyes and colours that would get washed out in the process of dyeing and printing of fabric undertaken by the assessee. The Assessing Officer has been directed to conduct the factual inquiry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act, but prior to this act of dyeing, various processes are undertaken for making the fabric fit for dyeing. The processes normally undertaken are as follows: (1) desizing (2) scouring (3) bleaching (4) mercerizing (5) dyeing and finishing. While the textile undergoes the aforesaid treatment, certain chemicals are used which are consumables and which do not hold on to the cotton fabrics. After completion of the aforesaid processes, dyeing is undertaken which holds on to the cotton fabric giving lasting impression and ultimately converts the grey fabric into printed fabric which is marketed in the market. In the act of dyeing, as also in printing, certain amount of chemicals, dyes and colours are washed out and they do not remain embedd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be imposed. The High Court of Bombay while answering the questions posed before it held that property of the material such as chemical colours and dyes used in the process of dyeing and printing is passed on to the fabric of the customer and as such passing of property of material is a deemed sale & tax is leviable on such materials under the works contract. The High Court had not expressed any opinion with regard to as to how much quantity of dyes and chemicals would be made subject matter of such tax. The issue which has not been decided by the courts below is to the quantum of chemicals, dyes and colours used in the process of job work of dyeing and printing which is taxable. The Tribunal relied upon the judgment of the Bombay High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the coloured shade on the fabrics represents the entire property of the materials used in dyeing. Therefore, it was not open to the Tribunal to hold that the coloured shade represents only very small quantity of the materials used for dyeing and, therefore, the Act is not applicable. In this reference, we are not concerned with the issue relating to the computation of tax on transfer of property in goods used in the execution of a works contract. We are only concerned with the applicability of the Works Contracts Act to the materials used in the execution of a works contract. As stated hereinabove, what is relevant for the applicability of the Works Contracts Act is the passing of the property in goods and not the quantity of goods that pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Civil Appeal No.821 of 2000, decided on 25.1.2001, the issue was whether drawings, designs etc. relating to machinery or industrial technology were goods which were leviable to duty of customs on their transaction value at the time of their import. In none of these decisions, the issue was with regard to the percentage/quantum of chemicals, dyes and colours used in the process of job work of dyeing or printing etc., which is taxable. Thus, learned counsel cannot derive any advantage from the said decisions. 26. Having arrived at the conclusion that chemicals used in the job work are taxable but the pertinent question to be answered would be as to how much of dyes/colours are taxable which is transferred to the fabric when the whole qu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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