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Adhishashi Abhiyanta Electricity Civil Mantnc. Div. Aligarh v. The Commissioner Of Trade Tax, U.P. Lucknow - SALES/TRADE TAX REVISION No. 255 of 1999  RD-AH 1199 (18 January 2006)
Court no. 55
Trade Tax Revision no. 255 Of 1999.
Trade Tax Revision no. 656 Of 1999.
Adhishasi Abhiyanta Electricity, Aligarh. ... Applicant.
The Commissioner of Trade Tax, U. P. Lucknow. ...Opp. Party.
Hon'ble Rajes Kumar, J.
These two revisions under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") are directed against the order of Tribunal dated 18.03.1999 relating to the assessment year 1989-90 both under the U. P. Trade Tax Act.
Applicant claimed to be a Government Department and engaged in the construction work. For the execution of construction, applicant had engaged Contractors. Assessing Authority found that as per the agreement, materials were supplied by the applicant to its Contractors for the value. Before the Assessing Authority, applicant claimed that under some of the agreement, materials were supplied free of costs, but the same could not be substantiated by adducing the copy of the agreement or any material, but in respect of some of the agreement, it had been accepted that the materials were supplied against the value which were deducted while making the payment. It was also claimed that the materials supplied to the Contractors were the U. P. purchased against Form 3-D, but it appears that the bills etc. relating to such purchases, could not be produced and therefore, Assessing Authority, by way of best judgment assessment, estimated the value of Cement and Steel supplied to the Contractors at Rs.90 Lacs during the year under consideration and levied tax thereon. Applicant filed appeal before the Assistant Commissioner (Judl.), Trade Tax. It is claimed that before the Appellate Authority, applicant has filed list of purchases made within the State of U. P. against Form 3-D and it is also claimed that on such list, report was also sought by the Appellate Authority from the Assessing Authority and in pursuance thereto, Assessing Authority verified such purchases. However, Appellate Authority vide order dated 20.3.1995 rejected the appeal. Applicant filed an application under Section 22 of the Act before the Appellate Authority on the ground that inspite of the verification being made by the Assessing Authority in pursuance of the remand report, no relief has been allowed. Appellate Authority rejected the application under Section 22 of the Act vide order dated 07.07.1995. Applicant filed two appeals before the Tribunal against the order of Assistant Commissioner (Judl.), Trade Tax. Tribunal vide impugned order dated 18.3.1999 rejected both the appeals.
Heard learned Counsel for the parties.
Learned Counsel for the applicant submitted that during the year under consideration under some of the contracts, materials were supplied against the value which were deducted while making payment to the Contractors and under some of the contracts, materials were supplied free of costs and value had not been deducted while making the payment to the Contractors. It is further submitted that substantial materials were purchased against Form 3-D within the State of U. P., which were supplied, to the Contractors, but the tax had been levied on such purchases also. He submitted that complete list of purchases made against Form 3-D of the Act were submitted before the Assistant Commissioner (Judl.), Trade Tax. Report was also sought by the Appellate Authority from the Assessing Authority and in pursuance thereof, the Assessing Authority, verified such purchases still the benefit of such purchases were not allowed. He submitted that the materials, which were supplied to the Contractors, were not the sale within the ambit of Section 2 (i) of the Act, inasmuch as, the supplied materials were used in the construction of the applicant and title on the goods had never been passed on the Contractors. Learned Standing Counsel submitted that the supply of materials for the value had been held as a sale by the Apex Court in the cases of N. M. Goel and Company Vs. CST reported in 1990 UPTC page 865 and Rashtriya Ispat Nigam Ltd. Vs. State of A. P. reported in JT 2002 (2) SC, 493 and Karya Palak Engineer Vs. Rajasthan Taxation Board, Ajmir and others reported in 2004 UPTC 1178 and the aforesaid decisions of Apex Court have been followed by this Court in the case of Commissioner of Trade Tax, U. P. Lucknow Vs. M/S Executive Engineer, Rampur reported in 2005 UPTC page 370.
Having heard learned Counsel for the parties and perused the order of Tribunal and the authorities below. In my view, argument of learned Counsel for the applicant that the supply of materials to the Contractors is not a sale within the purview of Section 2 (i) of the Act is not acceptable. The Apex Court in the cases of N. M. Goel and Company Vs. CST (supra), Rashtriya Ispat Nigam Ltd. Vs. State of A. P. (supra) and Karya Palak Engineer Vs. Rajasthan Taxation Board, Ajmir and others (supra), held the supply of materials for the value to the Contractors as a sale. The aforesaid decisions of Apex Court has been followed by this Court in the case of Commissioner of Trade Tax, U. P. Lucknow Vs. M/S Executive Engineer, Rampur (supra). However, the matter is remanded back to the Assessing Authority to examine whether the materials, which have been supplied to the Contractors, were the U. P. purchased and in case if they were U. P. purchased, necessary benefit should be allowed in accordance to law. Assessing Authority may also consider the actual materials supplied to the Contractors for the value, which had been deducted, from the amount of payment to the Contractors on the basis of evidences adduced by the applicant.
In the result, both the revisions are allowed in part. The order of Tribunal and the authorities below are set aside and the matter is remanded back to the Assessing Authority to pass assessment order afresh in the light of observations made above.
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