Court No. - 59
Case :- SALES/TRADE TAX REVISION No. - 1504 of 2008 Revisionist :- M/S Shipra Motel And Restaurant Opposite Party :- Commissioner Of Trade Tax/Commercial Tax U.P. Lucknow Counsel for Revisionist :- Ashok Kumar,Praveen Kumar Counsel for Opposite Party :- C.S.C. And Case :- SALES/TRADE TAX REVISION No. - 1503 of 2008 Revisionist :- M/S Shipra Motel And Restaurant Opposite Party :- Commissioner Of Trade Tax/Commercial Tax U.P. Lucknow Counsel for Revisionist :- Ashok Kumar,Praveen Kumar Counsel for Opposite Party :- C.S.C.
Hon'ble Saumitra Dayal Singh,J.
1. Heard Shri Praveen Kumar, learned counsel for the applicant-assessee and Shri B.K. Pandey, learned Standing Counsel for the respondent-revenue.
2. Revision Nos.1504 of 2008 and 1503 of 2008 have been filed by the assessee against the common order of the Commercial Tax Tribunal, Ghaziabad dated 12.06.2008 arising from Second Appeal Nos.315 of 2005 and 745 of 2004 respectively. By that common order, the Tribunal has dismissed the appeals filed by the assessee and affirmed the order of the first appeal authority and thereby confirmed the imposition of tax on the sale of goods, namely, cement made by the applicant to its contractor.
3. Admittedly, in the assessment years in question, the assessee had awarded certain works contract to certain contractors. Undisputedly, payments were to be made on per sq. ft. of construction raised. Also, as per the terms of contract, the construction material was to be procured by the contractors and not the assessee/contractee.
4. However, the parties conducted themselves differently. With respect to the cement, it is the assessee's case that only for the purposes of ensuring better quality of the constructions being raised it made supplies of cement to the contractor. Thus, deviating from the original terms of the written contract, with respect to the payment to be made by the assessee to such contractors, instead of recomputing the per ft. construction rate, the assessee adjusted the value of cement supplied from the payments made at contract rate.
5. Accordingly, the authorities took a view that the assessee had sold the cement to the contractor who made use of the same in the construction raised by him.
6. Both the revisions were entertained on the following questions of law:-
"A. Whether the Trade Tax Tribunal as well as the authorities below were justified in rejecting the claim of the revisionist and holding that the supply of cement made by the revisionist to its contractor as sale under section 2(h) read with section 3-F of the Act?
B. Whether the Trade Tax Tribunal was not legally justified in holding that the goods supplied by the revisionist to its contractor were not covered under the provisions of Section 3, 4 and 5 of the Central Sales Tax Act?"
7. Learned counsel for the assessee would submit that the sale involved in the said goods and the supply of cement were made only for the purposes of ensuring the satisfactory quality of constructions and there was no sale.
8. Learned Standing Counsel, referring to Section 3-F(2) (b)(v) of the Act, would submit that no benefit can be claimed by the assessee, since there was no stipulation in the contract allowing for the ownership for the goods, i.e., cement to remain with the assessee/contractee under the terms of that contract.
9. Having heard learned counsel for the parties and having perused the record, the assessment to be made with respect to works contract are governed by the statutory scheme contained in Section 3-F of the Act. Clearly, the assessee's case does not fall within the exception created by Section 3-F(2)(b)(v) of the Act. Even otherwise, there is no evidence led to establish that the entire quantities of cement remained the property of the assessee. By charging fo cement supplied to the contractor, the assessee clearly signified execution of sale of such quantities to the contractor. Since, the entire quantities of cement had been imported into the State by the assessee, it has been rightly subjected to tax treating it to be the manufacturer/importer of the cement inside the State.
10. In view of the above, question of law no.(A) is answered in the affirmative, i.e. in favour of revenue and against the assessee.
11. Insofar as the second question is concerned, again, once the assessee received the entire quantity on purchase of cement inside the State on its own account and, thereafter subjected the same to sale to its contractors inside the State. In absence of any documentary or other evidence, such sale having not been conducted while the goods were in transit, the same has rightly been treated to be a second sale and not part of the inter-state sale transaction between the manufacturer of the cement (outside the State) and the applicant (inside the State).
12. Similar question has arisen in the case of Sales/Trade Tax Revision No.185 of 2009 (R.M. Entertainment Vs. Commissioner Commercial Tax), wherein the same has been answered in favour of the revenue and against the assessee.
13. Accordingly, question of law no. (B) is also answered in the negative, i.e. in favour of revenue and against the assessee.
14. Both revisions lack merit and are accordingly dismissed.
Order Date :- 21.8.2019 Saif