Telangana High Court
M/S.Sarveswara Timber ... vs The Stat.,Govt Of Ap.,Hyd on 5 December, 2022
Author: T.Vinod Kumar
Bench: T. Vinod Kumar
THE HON'BLE SRI JUSTICE T. VINOD KUMAR
AND
THE HON'BLE SRI JUSTICE PULLA KARTHIK
Tax Revision Case No.50 of 2003
ORDER:(per Hon'ble Sri Justice T.Vinod Kumar) This Tax Revision Case is filed by the petitioner-assessee aggrieved by the order of the Sales Tax Appellate Tribunal, Hyderabad (for short, 'the Tribunal') dt.20.09.2001 in T.A.No.1650 of 1999. The assessment year involved is 1994-95.
2. Heard learned counsel for the petitioner and Sri K.Raji Reddy, learned Special Standing Counsel, appearing for the respondents and perused the record.
3. The petitioner being aggrieved by the order of revision, dt.10.09.1998, passed under Section 20(2) of the A.P. General Sales Tax Act, 1957 (for short, 'the Act'), by the Deputy Commissioner (CT), Warangal Division, had filed the appeal before the Tribunal, in T.A.No.1650 of 1999, primarily contending that it had prepared doors and windows from and out tax suffered timber purchased by it and used the same in execution of works contract of fixing wooden doors and windows at the premises of various Government offices; that the timber purchased by it, at the relevant point of time is liable to tax under Entry 63 of Schedule I of the Act and is liable to tax at the point of first sale; and that 2 since the doors and windows made out of timber, being one and the same, such goods cannot be subjected to tax once again under the provisions of Section 5-F of the Act, which was introduced w.e.f.01.04.1995, and the assessment year involved being 1994-95, no tax can be levied by treating the same as deemed sale under works contract.
4. To support its contention, the petitioner placed reliance on the decision of the Tribunal in the case of Lakshmi Kisan Industries and others v. State of Andhra Pradesh1 and the order of the Co-ordinate Bench of the Tribunal in M/s. Crafts 'N' Crafts, Visakhapatnam v. State of Andhra Pradesh2, wherein it was held that doors, windows and frames manufactured out of tax suffered timber are not liable to tax.
5. Learned counsel for the petitioner contends that though the Tribunal had taken note of the fact that Section 5-F of the Act was introduced w.e.f. 01.04.1995, however, subjected the goods to tax, on the ground that the windows and doors are a form of timber transferred in execution of works contract, and therefore, they are different commercial goods, liable to tax.
1 (1994) 19 APSTJ 163 2 T.A.Nos.515 of 1991and 935 of 1993 dt.24.03.1994 3
6. Assailing the correctness of the said order of the Tribunal, the present revision is filed on the following questions of law:
1. 'Whether the Tribunal failed to follow the principle laid down in the binding decision of three member bench in the binding decision of three member bench in the case of Lakshmi Kisan Industries (19 APSTJ 163) to the effect that in a transaction of works contract, the raw material has to be reckoned and not any altered forms of the raw material?
2. Whether the Tribunal failed to follow the decision of the bench of coordinate strength rendered in TA.No.515/91 dated 24.3.1995 which is directly on point?
3. Whether the Tribunal failed to appreciate the language of Explanation VI to the definition of sale in Section 2(n) wherein the goods used and supplied in execution of works contract are deemed to be sold and as such in Petitioner's case it is timber that is assessable and not doors and windows?
4. Whether the Tribunal failed to appreciate that it is only from 1.4.1995 by virtue of separate charging Section 5F goods used in execution of works contract became liable to tax irrespective of the question whether the goods suffered tax earlier or not?
5. Whether the order of the Tribunal is also contrary to the decision of this Honourable Court in Media Communications case (105 STC
227)?'
7. We have taken note of the contentions urged as above.
8. In similar circumstances, this Court, vide order dt.29.11.2022, in T.R.C.No.165 of 2003, filed by the Revenue assailing the order of the 4 Tribunal in T.A.No.669 of 1997 dt.22.05.2002, wherein the Tribunal had taken a view that the raw material purchased, being liable to single point of levy of tax when used in execution of works contract cannot be subjected to tax, till the introduction of Section 5-F of the Act, w.e.f.01.04.1995, merely on account of expansion of definition of 'sale' in Section 2(n) of the Act by insertion of Explanation-VI w.e.f. 01.07.1985, had concurred with the view of the Tribunal that though the provisions of the Act have been amended consequent to the 46th constitutional amendment, by including in the definition of 'sale' deemed sales and also defining as to what constitutes a works contract, no tax can be levied in absence of charging section to levy tax on such transactions of works contract. Since this Court had already held in T.R.C.No.165 of 2003 as to the non-exigibility of the tax of the goods used in execution of works contract prior to introduction of Section 5-F of the Act (w.e.f. 01.04.1995), the view taken by the Tribunal in the Appeal in TA.No.1650 of 1999, against which, the present revision is preferred, appears to this Court to be a contrary view taken by the Tribunal in similar circumstances.
9. Having regard to the above, in the facts of the present case, this Court is of the considered view that the conclusions arrived at by the Tribunal that the concession of tax suffered timber into making doors and windows and used in execution of works contract as exigible to tax, is 5 contrary to the decision taken by the Tribunal T.A.No.669 of 1997, which was confirmed by this Court in T.R.C.No.165 of 2003 dt.22.11.2022, apart from the fact that the said view being contrary to the provisions of the Act.
10. Thus, this Court is of the considered opinion that by mere insertion of Explanation-VI to definition of 'sale' in Section 2(n) and definition of 'works contract' in Section 2(t) would not by itself make the transaction of 'deemed sale' exigible tax till the introduction of charging section 5-F in the Act.
11. Since, the assessment year involved being 1994-95, the petitioner is not liable to pay tax on the tax suffered timber purchased by it and used for preparing doors and windows and fixing the same amounting to execution of 'works contract'.
12. We accordingly allow this Tax Revision Case answering the points in favour of the assessee.
13. Miscellaneous petitions, if any, pending in the writ petition shall stand closed. No order as to costs.
__________________ T. VINOD KUMAR, J Date:05.12.2022 _________________ PULLA KARTHIK, J GJ 6 THE HON'BLE SRI JUSTICE T. VINOD KUMAR AND THE HON'BLE SRI JUSTICE PULLA KARTHIK Tax Revision Case No.50 of 2003 (per Hon'ble Sri Justice T.Vinod Kumar) 05.12.2022 GJ 7