TMI Blog2021 (3) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... nd pumping charges into the taxable turnover are concerned is liable to be quashed. Therefore, to that extent the impugned order is quashed. Tax Deducted at Source (TDS) - HELD THAT:- There cannot be any grievance of the petitioner as the case has been remitted back to the 1st respondent to pass a speaking order after due verification. The 2nd respondent has clearly held that for administrative delay or deficiency in the mechanism of transfer of TDS credits to the petitioner s account, the petitioner cannot be made to suffer. There are different kinds of transactions involved. Some are pure supply and therefore sale and some were deemed sale viz. works contract within the meaning of Section 2 (u) of Tamil Nadu General Sales Tax Act, 1959. When the petitioner ad-disguised sale as 'works contract' - Since the question as to whether the transaction involved sale or works contract liable to tax under Section 3B or under Section 7C of the Tamil Nadu General Sales Tax Act, 1959 is a question of fact. No conclusion on facts can be arrived under Article 226 of the Constitution of India based on sample copies of invoices filed by the petitioner before this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 013 wherein a Division Bench of this Court had allowed the appeal . 7. It is therefore submitted that the impugned order passed by the 2nd respondent Appellate Joint Commissioner (CT) (F AC) was in direct contravention of the said decision and that the observation of the Supreme Court in Union of India versus Kamalashi Finance 1992 (1) SCC 433 was attracted wherein the Honourable Supreme Court held that The position now, therefore, is that, if any order was passed by and Assistant Collector or Collector is adverse to interest of the revenue, the immediately higher administrative authority has the power to issue the matter satisfactorily resolved by taking up the issue to the appellate Collector or the appellate Tribunal as the case may be. In the light of these amended provisions, there can be no justification for the assistant collector or the collector refusing to follow the order of the Appellate Collector or the Appellate Tribunal,, as the case may be, even where he may have some reservation on its correctness. He has to follow the order of the higher appellate authority. This may instantly cause some prejudice to the revenue but the remedy was also in the hands of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntract and that the assessee is entitled to have the benefit of exemption as had been pointed out in Government order referred to in circular dated April 29, 2004, viz., G.O. Ms. No. 50/90/F6 dated December 10, 1990 . 11. The learned counsel for the petitioner further submits that as per the decision of the Hon'ble Supreme Court in Larsen Toubro Ltd. v. State of Karnataka, (2014) 1 SCC 708 : 2013 SCC OnLine SC 889 at page 746 for determining whether an activity amounts to sale simplictor or work-contract, dominant intention of the contract is not be looked into. He refers to the following passages from the said decision of the Hon ble Supreme Court which reads as under: - 60. Whether the contract involved a dominant intention to transfer the property in goods, in our view, is not at all material. It is not necessary to ascertain what is the dominant intention of the contract. Even if the dominant intention of the contract is not to transfer the property in goods and rather it is the rendering of service or the ultimate transaction is transfer of immovable property, then also it is open to the States to levy sales tax on the materials used in such contract if i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... athmal and five Others vs. Superintendent of Taxes, Dhubri and Others, (1964) 6 SCR 654 : AIR 1964 SC : 1419 : (1964) 15 STC 468 xvi) Commissioner of Income Tax, Lucknow vs. U.P.Forest Corporation, (1998) 3 SCC 530 xvii) Larsen Toubro Limited vs. State of Tamil Nadu Rep.by the Joint Commissioner, 2018 SCC Online Mad 12418 xviii) Commissioner of Income Tax, Lucknow vs. U.P.Forest Corporation, (1998) 3 SCC 530 xix) Larsen and Toubro Limited and another vs. State of Karnataka and another , (2014) 1 SCC 708 14. As far as the second issue is concerned, regarding the inclusion of freight and pumping charges, it is submitted that the issue is squarely covered by the decision of this Court rendered in Larsen Toubro Limited v. State of Tamil Nadu Rep. by the Joint Commissioner , 2018 SCC OnLine Mad 12418 wherein, it held as follows:- 7. As pointed out earlier, the Tribunal has not given any reason to discredit the factual findings recorded by the first Appellate Authority. We find the order to be a well reasoned order. The first Appellate Authority has taken into consideration the contentions raised by the assessee; the documents produced by it and fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Tax Act, 1959. The claim for paying tax under the composition scheme under Section 7C of the Tamil Nadu General Sales Tax Act, 1959 was denied. It is submitted that the Sales Tax Appellate Tribunal had also dismissed the petitoner s appeal in STA.Nos.89/09 and 90/99. 17. I have considered the arguments advanced by the learned counsel for the petitioner and the respondents. 18. In my view, the present writ petition ought not to have been admitted in the 1st place as the petitioner had an alternate remedy before the Sales Tax Appellate Tribunal against the impugned order passed by the 2nd respondent Appellant Joint Commissioner. 19. Be that as it may, since the writ petition was admitted in the year 2012 and an interim injunction was ordered by restraining the Commercial Tax Department from proceeding further with the recovery proceedings pursuant to the impugned order of the 2nd respondent, it would be unfair to relegate the petitioner to an alternate remedy at this distant point of time. Further, one of the issue can be answered based on the law. Therefore, I take up the case and dispose this writ petition on the merits. 20. Therefore, before dealing the 1st issue, I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cubic metre of Ready Mix Concrete, can TNGST Act and the appellants' claim for sales under Section 3(2) of the TNGST Act and the appellants' claim for sales under Section 7 C cannot operate. The activities of pumping, laying, curing etc., that would be normally carried out by the parties engaged in the civil construction works, even if awarded to the assessee to be executed, will not alter the basic character of the orders for supplies of Ready Mix Concrete are part and parcel of the orders for supplies of 'Ready Mix Concrete' as chattel, the incidental labour loses its significance in the claim of transactions and as a corollary the claim for works contract evaporates as per the ratio of the decisions of the Hon'ble Supreme Court in 119 STC 533 ( Hindustan Shipyard Ltd., ) 140 STC 22 (Kone Elevators India ) Ltd. The decisions cited by the learned departmental representative support the stand of the assessing authority on the issue. The assessee having undertaken supplies of ready mix concrete at per cubic metre basis (both in case of outright sales and also in case of turnover reported under Section 7- C of the TNGST Act) and the supply being one not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpressor for delivery at the desired spots of building area . Whether a contract is a contract for sale or a contract for performance of work and labour depends on the construction of the contract in the light of the surrounding circumstances, the object of the transaction and the intention of the parties while entering into the contract. The intention of the parties in entering into the contract can be ascertained taking into consideration the transaction as a whole in its true perspective. If the passing of the property is ancillary to the performance of the work then it will not render the transaction a transaction of sale . Even in a contract purely for work or services, property in goods may pass to the other party. Explanation Section 7C (4) of TNGST Act, 1959 which reads as follows: Explanation: - For the purpose of this section civil works contract , means civil works of construction of new building, bridge, road, runway, dam or canal including any lining, tiling, painting or decorating which is an inherent part of the new construction; but shall not include any repair, maintenance, improvement or upgradation of such civil work by means of fixing and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal and to convince the Appellate Tribunal on this accept and the applicability of the decision of the Court in Thirumalai Ready Mix Concrete v. State of Puducherry, 2013 SCC OnLine Mad 3938 : (2014) 74 VST 247 and the decision passed in its own case in STC Nos.89 90 of 1999. 32. I therefore partly allow the writ petition insofar as Issue No.2 relating to inclusion of pumping and freight charges into the turnover. As far as issue no.3 is concerned, the 1st respondent is directed to pass appropriate orders within a period of three months from the date of receipt of a copy of this order in terms of the impugned order dated 25.6.2012 of the 2nd respondent Appellate Joint Commissioner of Commercial Taxes (CT) (FAC). 33. Insofar as the 1st issues is concerned, liberty is given to the petitioner to file a statutory appeal within a period of 30 days from the date of receipt of a copy of this order subject to the compliance and statutory requirements for entertaining the appeal including mandatory pre-deposit of disputed tax amount at the time of filing such appeal. If such appeal is filed together with pre-deposit by the petitioner within the aforesaid period of 30 days, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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