TMI Blog2023 (3) TMI 1269X X X X Extracts X X X X X X X X Extracts X X X X ..... h the appellate order, it would be without jurisdiction. Since the assessment for the subject-year framed under Section 12(4) has already attained finality at the second appellate level, there was no scope to initiate proceeding under Section 12(8) of the O.S.T. Act. The reopening of the case basing on the A.G. audit report has further negated the issues, as held in the case of COMMISSIONER OF INCOME-TAX VERSUS LUCAS TVS. LTD. [ 2000 (12) TMI 102 - SC ORDER ] by the apex Court that if the Assessing Officer accepts the audit report, it would be vulnerable and report of the audit party cannot make the basis to issue notice for reassessment under Section 148 of the of the I.T. Act, which is pari materia to Section 12(8) of the O.S.T. Act, 1947, since the common issues were involved on erection and installation of machinery, which constituted works contract but not for sale. Once the Full Bench of the Odisha Sales Tax Tribunal held that the petitioner being a contractor executed works which were indivisible contract and came to a conclusion that works executed by the dealer during the period were entertained as works contract and made exigible to tax @ 4%, a different vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Conditioning system is divisible in nature comprising one is for supply of materials and the other is for execution of works. In support of their observation, they cited the contract entered into by the petitioner with M/s Sri Gopinath Weavers Co-Operative Spinning Mill Ltd., Bhubaneswar, where separate provisions were made for supply of goods and installation of equipments. The A.G Audit Party also observed that there is underassessment of tax, as the turnover relating to payments received towards supply of goods has been taxed @ 4%. They suggested for taxation of supply portion @ 13%. The objection of audit party is that it has been wrongly taxed @ 4% on works contract instead of 13%. 2.1 Basing on the above audit objection, the STO reopened the assessment under Section 12(8) of the O.S.T. Act, 1947. The STO, after taking into account the audit objection, completed the reassessment proceeding treating the contracts as divisible one. Similarly, considering the nature of work executed, he allowed the petitioner reasonable deduction towards payment of labour and service charges and completed the assessment under Section 12(8) of the O.S.T. Act, 1947 by raising an extra demand of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not under the fact and circumstances of the case, the Assessing Officer was justified in law in not following the principle of Doctrine of merger and initiating proceeding for reassessment under Section 12(8) of the O.S.T. Act, 1947 even after such objection raised by the assessee. (vi) Whether or not under the fact and circumstances of the case, the Assessing Officer was justified not to supply the certified copy of the order sheet indicating the basis for re-opening the assessment even though the assessee requested for the same. 4. In the above backdrop of the case, this Court formulated the following questions of law for adjudication:- (i) Whether or not under the facts and circumstance of the case the Division Bench of Tribunal was justified in law in not following the decision of the Full Bench and Division Bench of the same Tribunal in the assessee s own case involving same issue holding that supply erection, installation, testing, commissioning of execution of work in its entering in turnkey basis of humidification plant to M/s. Gopinath weaver's Co-operative Spinning Mills Ltd., Bhubaneswar after examining the essential features as well dominating obj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year in question is divisible one and it cannot be considered as composite one. Accordingly, the petitioner is liable to pay tax @ 13% instead of 4%. As such, the order passed by the second appellate authority is well justified and does not warrant interference by this Court. 7. The pleadings available on record reveal that the petitioner-dealer, as a limited company, entered into an agreement with Sri Gopinath Weavers Limited for supply, erection, including the installation and commissioning of humidification of plant including the construction of foundation on which the plant would be installed comprising of several units and assembly and sub-components. After the foundation was laid down, the Engineers undertook the technical examination of installation of foundation and its alignment, levelling etc., wherein contract of supply, erection, installation, etc. was involved, which attracted execution of works contract and not sale. Accordingly, the petitioner filed return under Rule 6(A) of the Orissa Sales Tax Rules, 1947. The issue cropped up for adjudication of transactions for the purpose of levy of tax under execution of works contract. Although the original a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of machineries constituted the works contract as a whole for last so many years was also upheld by the Full Bench as well as Division Bench of the Odisha Sales Tax Tribunal and the State of Odisha wherein was the appellant had not raised any objection in the higher forum but accepted the principle of law settled therein. 10. The law regarding contract for supply, erection and thereafter installation of machinery was entertained as contract work and no independent sale had ever been made since the principles of law have already been decided in number of cases also and the petitioner is deriving the principles from the case of Commissioner of Sales Tax v. Brimco Plastic Machinery Pvt. Ltd., 99 STC 140 (Bombay) and Commissioner of Sales Tax v. Steel Plant Pvt. Ltd. 99 STC 532 (Bombay) had categorically stated that the works contract executed along with supply installation etc. will be taxed as works contract exigible to Orissa Sales Tax @ 4%. 11. In the case of Ugratara Bhojanalaya, (1993) 91 STC 76 (Ori), it has been held that if the assessing authority initiates proceeding under Section 12(8) of the O.S.T. Act in respect of assessment which has merged with the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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