TMI Blog2004 (8) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... propriate authorities. For the reasons stated above these appeals fail and are dismissed. - Civil Appeal No. 8540-8552 of 2001, - - - Dated:- 12-8-2004 - N. Santosh Hegde, S.B. Sinha and A.K. Mathur, JJ. Civil Appeal No. 1996, Civil Appeal No. 1997, Civil Appeal No. 5270-5273, Civil Appeal No. 6614, Civil Appeal No. 6615, Civil Appeal No. 6977, Civil Appeal No. 6978, Civil Appeal No. 6979, Civil Appeal No. 6980, Civil Appeal No. 6983, Civil Appeal No. 6984, Civil Appeal No. 6985, Civil Appeal No. 6986, Civil Appeal No. 6987, Civil Appeal No. 8940, Civil Appeal No. 8941, Civil Appeal No. 8942, Civil Appeal No. 8943, Civil Appeal No. 8944, Civil Appeal No. 8945, Civil Appeal No. 8946, Civil Appeal No. 8947, Civil Appeal No. 8948, Civil Appeal No. 8949, Civil Appeal No. 8950, Civil Appeal No. 8951, Civil Appeal No. 8952, Civil Appeal No. 8953, Civil Appeal No. 8954, Civil Appeal No. 8955, Civil Appeal No. 9025, Civil Appeal No. 9026, Civil Appeal No. 9027, Civil Appeal No. 9028 of 2003, Civil Appeal No. 194, Civil Appeal No. 195, Civil Appeal No. 4634, Civil Appeal No. 4635, Civil Appeal No. 4636, Civil Appeal No. 4637, Civil Appeal No. 4638, Civil Appeal No. 4639, Civil Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rks Department (CPWD) undertook the work of erection of barbed wire fencing along Indo Pak border from 1991 onwards in the State of Rajasthan. In order to get the construction work done the appellant awarded contracts to various contractors and under the terms and conditions of the said contract it had agreed to supply the contractors materials such as cement, barbed wire, M.S. angles etc. It is pleaded that the appellant purchased the materials from various reputed concerns on payment of consideration and the said transactions were subjected to Sales Tax leviable at that stage. It is further stated that the very same goods were in turn supplied to the contractors and value of the said goods were adjusted in the final bills of the contractors, it is contended that since the appellant issued materials to the contractors at fixed issue rates, the said supply did not amount to Sale because the contractor never became owner of such materials but remained only as a ''Custodian of such materials and used them on creation of immovable properties for completing the contracted job. In such circumstances, it is contended that there is no element of sale, therefore, the appellant U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ternative that assuming the transactions are sales even then under the local Act, the levy being single point tax and appellant having suffered the levy when it purchased the same there could not have been a second demand on a transfer made by it to its contractor, the same being a second sale. Shri Krishnamani, learned Senior Counsel appearing in C.A. Nos. 1996-1997/2003, C.A. Nos. 4634-4640/2004 and C.A. Nos. 4651-4661/2004 contended apart from the fact that the transfer involving a property of the Union of India cannot be taxed under Article 285 even under the local Act, the Union of India cannot be a dealer under Section 2(14) of the said Act. The other Advocates appearing in other appeals mostly adopted the arguments of the above referred Counsel. 12.Having heard the learned Counsel for the parties and having perused the judgment of the High Court and the relevant clause in the agreement between the appellant and their contractors concerned we are satisfied that the question involved in these appeals are no more res integra. This Court as far back as in the year 1963 in a presidential reference case under Sea Customs Act held : The bar of Article 289 of the Constitution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of Article 285 of the Constitution on goods purchased by the Railways and sold by the Railways in their Catering Department. This Court said that at the time of their sale, the goods belonged to the Railways. The tax had been imposed on such sale. In view of the provisions of Article 285, such sale was immune from taxation under the State law. It would appeal that no real arguments were advanced before this Court by the appellant-State and the judgment of this Court in Sea Customs Act (1878), S. 20(2), AIR 1963 SC 1760 (1964) 3 SCR 787 was not pointed out. In the Sea Customs Act case a nine-Judge Bench of this Court opined by a majority, that Article 285 envisaged immunity from direct taxes and not from indirect taxes such as sales tax. With specific reference to sales tax, this Court said :- We may in this connection contrast sales tax which is also imposed with reference to goods sold, where the taxable event is the act of sale. Therefore, though both excise duty and sales tax levied with reference to goods, the two are very different imposts; in one case the imposition is on the act of manufacture or production while in the other it is on the act of sale. In neither ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of the property, where a party purchases or procures goods from the Government. Mere passing of property would not suffice. There must be sale of goods. The primary object of the bargain judged in its entirety must be viewed. In the instant, case, Clause 10 is significant. Though in a transaction of this type there is no inherent sale but a sale inheres from the transaction. Clause 10 read in the proper light indicate that position. By use or consumption of materials in the work of construction, there was passing of the property in the goods to the assessee from the PWD. By appropriation and by the agreement, there was a sale as envisaged in terms of Clause 10 of the contract. 19.In the case of Rashtriya Ispat Nigam Ltd. v. State of A.P. - 1998 (8) SCC 439 this Court relying on the said judgment of M/s. N.M. Goel Co. (supra) held :- For the purpose of performance, the contractor was bound to procure 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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