TMI Blog2006 (11) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... wn cost, and recover the same out of the final bills; the petitioner has to return the excess materials and gunny bags after the completion of the work; the income-tax payable on the contract amount bill would be deducted from and out of the payment to be made to the petitioner in accordance with the provisions of the Income-tax Act, 1961 as tax deducted at sources (TDS); the payment of the Sales tax, if any made applicable by the Government of Tamil Nadu for the pole manufacturing works shall be borne by the Board and the contractor is entitled to make claim if any on production of the notice issued by the Government of Tamil Nadu, the said contract was for sale of goods, viz., RCC Poles or contract for work, for the supply of the labour, out of the materials supplied by Board. 2. To decide the above question, we are constrained to look into the essence of the agreement and find out what was the intention of the parties in making the contract, viz., Manufacture of RCC Poles and Grills out of the materials supplied by the Board and transfer to the Board; and to decide whether such transaction is substantial one for execution of work or is for performance of some service or sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here from he intents to obtain materials subject to the approval of the Assistant Engineer. 3.2.5 The agreement specifically provides that the tenderer shall execute the work for the Board by piece-work. 3.2.6 Schedule-B of the agreement deals with the submission of tender and clause 1.7 (a) provides that the allotment of work shall be according to the capacity of the contractor and may be varied from time to time to suit the exigencies and overall programme of work. 3.2.7 Clause 2.0 of Schedule-B of the agreement provides that income-tax payable on the contract amount at the appropriate rate levied from time to time will be deducted from and out of the payment to be made to the contractors in accordance with the provision of the Income-tax Act, 1961 as amended from time to time. 3.2.8 Clause 10.1 of Schedule-B of the agreement provides that the Board's officers should have free access to inspect and examine the workmanship, materials used, etc., at any time and qualified supervisory staff of the contractor should be available at site so that clarifications if any required by the Board's officers could be furnished then and there. 3.2.9 Clause 11 of Schedule- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Act. 3.2.18 Clause (6) of Schedule 'E' of the agreement provides that the contractor should return all the materials, if any, after completion of work. If not returned, recovery will be made at the rates prevailing in the Board with other charges without intimation. 3.2.19 Clause (8) of Schedule 'E' of the agreement provides that great care should be taken to preserve and return the gunny bags to the department. Recoveries for the empty gunny bags not returned in good condition will be charged at Rs. 1.50 per bag from the contractor's bill. 3.2.20 Clause (13) of Schedule 'E' of the agreement provides that the payment of the Tamil Nadu Government Sales Tax if any made applicable by the Government of Tamil Nadu for this pole manufacturing works will be borne by the Board and have the contractor is entitled to make claim if any on production of notice issued by the Government of Tamil Nadu. 4. Under the above terms and conditions of the agreement entered into between the petitioner and the Board, the Assessing Officer, by order dated 24-2-1997, came to be conclusion that the supply of RCC poles by the petitioner to the Board is noth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a member thereof for cash, deferred payment or other valuable consideration; (vi) a supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating) where such supply or service is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made. Section 2(u). - works contract includes any agreement for carrying out for cash, deferred payment or other valuable consideration, the building, construction, manufacture, processing, fabrication, erection, installation, fitting out, improvement, modification, repair or commissioning, of any movable or immovable property. (emphasis supplied) 8. Even before the introduction of Section 2(u) of the TNGST Act by Act 28 of 1984, notification dated 29-5-1984, with effect from 29-5-1984, the Apex Court in Hindustan Aeronautics Ltd. v. State of Oris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 2(n) of the TNGST Act. The express terms of the agreement in question provides that cement, sand, water and everything is supplied by the Board and the petitioner cannot sell the same assuming, after manufacturing the same into a finished product, to the owner of the raw materials itself. What was added by the petitioner in the process of the manufacture is only value of work or labour, as clearly mentioned in the agreement itself as a works contract. 12. That apart, it is trite that when a word or a phrase is defined as having a particular meaning, it is that meaning which must be given to it, in interpreting a section of the Act, unless there is something repugnant in the context, when a legislature defines the language it uses, its definition is binding upon the Court and this is so even though the definition does not coincide with the ordinary meaning of the word used. It is not for the Court to ignore the statutory definition and proceed to try and extract the true meaning of the expression independently of it. 13. If that be so, we do not see any hesitation to hold that the views expressed by the Sales Tax Appellate Tribunal are perfectly valid and justified and are i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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