Allahabad High Court
The Commissioner Trade Tax vs S/S Indian Railway Construction ... on 9 February, 2005
Author: Rajes Kumar
Bench: Rajes Kumar
JUDGMENT Rajes Kumar, J.
1. These two revisions under Section 11 of U. P. Trade Tax Act (hereinafter referred to as 'Act') are directed against the order dated 23.10.2004 relating to assessment years 1991-92 and 1992-93 respectively.
2. The Opp. Party is the Contractor and is Government of India Enterprises. It entered into a contract with Northern Railway, Allahabad for execution of works contract at Agra Region for Railway Electrification/Railway Transmission Line and Railway Sub Stations. The works was started in the year 1987-88 and was also executed during the year under consideration. Opp. Party maintained books of account in the form of Cash book, Ledger, Journal, Invoices, Purchase Vouchers and Stock registers etc, which were presented at the time of assessment before the Assessing Authority. The total contract amount was Rs. 102188299.00. Opp. Party had purchased goods from outside the State of U. P. in the course of interstate from approved manufacturers who have manufactured goods as per specific designs and standards and after inspection by the Railway Inspection Body i.e. Railway Index and Technical and Economic Services (RITES) at the manufacturer's Depot and after receiving such goods, used the same in the works contract. Before the Assessing Authority it was claimed that the goods used in the execution of works contracts, were imported from outside the State of U. P. in the course of export and as such, the transactions were covered under Section 5, 4 and 5 of the Central Sales Tax Act and therefore, were liable to be excluded from the ., gross turnover in view of Section 3-F (2) (b) (i) of U. P. Trade Tax Act. Assessing Authority, however, has not allowed such claim and levied tax on the value of goods imported from outside the State of U. P. after adding 15% profit. First Appeal filed by the opp. party was allowed and claim of opp. party was accepted and the tax levied on the alleged turnover of imported goods, have beer deleted. Commissioner of Trade Tax filed appeals before the Tribunal, which have been dismissed by the impugned order. Being aggrieved by the order, present revisions have been filed.
3. Heard Learned Standing Counsel.
4. Learned Standing Counsel submitted that the view taken by the Tribunal is not correct. He submitted that in the present case, goods have been firstly imported by the opposite party and thereafter used in the works contract, therefore, the import of goods from outside the State of U. P. and its use in the execution of works contract were two separate transactions and therefore, not covered by Section 3, 4. 5 of the Central Sales Tax Act.
5. I do not find any substance in the argument of learned Standing Counsel.
6. In the case of State of Madras v. Gannon Dunkerley & Company and others reported in (Madras), 9 STC page 353, Apex Court had a occasion to consider whether in the building contract which was in the nature of composite and indivisible works contract, there was a sale of goods, Apex Court held that there was no sale of goods.
7. After the decision of Gannon Dunkerley & Company case (aforesaid), matter with regard to taxability of goods involved in the execution of works contract, was examined by the Law Commission. In its 61st Report the Law Commission after considering the legal position including the decision in Gannon Dunkerely & Company case, expressed view:-
Before the judgment of Supreme Court, however sale was usually regarded as including a works contract The question is ultimately one of policy, but the Commission would prefer restoration of the power to the States.
Narrow interpretation of the expression 'sale' was not the practice before the Hon'ble Supreme Court judgment. Entries in the legislative list, should receive a broad interpretation. Fine nuances need not be material. The transactions resemble sale in substance. Hence, power should be given to the States.
If this alternative is adopted there are several drafting devices open, e. g.
(a) amending State List, entry 54, or
(b) adding a fresh entry in the State List, or
(c) inserting in Article 366 a wide definition of sale' so as to include works contracts.
The Commission prefers the last one, it would avoid multiple amendments."
8. Keeping in view the said recommendation of the Law Commission, the Constitution was amended by the Forty-sixth Amendment. By the said amendment clause (29-A) was inserted in Article 366 and clause (3) of Article 283 was substituted, The other amendments introduced by it are not relevant for this case. Clause (29-A) of Article 366 is in the following terms:
(29-A) 'Tax on the sale or purchase of goods includes-
(a) a tax on the transfer otherwise than in pursuance of a contract, of property in any goods for cash. deferred payment of other valuable consideration;
(b) a tax on the transfer of the property in goods (whether as goods or in some other form) involved in the execution of a works contract;
(c) a tax on the delivery of goods on hire purchase or any system of payment by installments;
(d) a tax on the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration;
(e) a tax on the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other, valuable consideration;
(f) a tax on the 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."
Clause (3) of Article 286 provides as under:
"(3) Any law of a State shall, in so far as it imposes, or authorities the imposition of-
(a) a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter State trade or commerce; or
(b) a tax on the sale or purchase of goods, being a tax of the nature referred to in sub clause (b), sub clause (c) or Sub-clause (d) of Clause (29-A) of Article 366, be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify."
9. After the forty-sixth Amendment, various States legislature amended their sales tax legislation to make provision for imposition of sales lax in relation to works contracts. State of U.P. has made the amendments in the U.P. Trade Tax Act and has amended the definition of sale provided in Section 2(h) and introduced Section 3-F to levy tax on the value of goods, involved in the execution of works contract. Constitutional validity of Forty-Sixth amendments as well as amendment made in the State Legislation were challenged before the Apex Court in the case of Builders Association of India v. Union of India reported in 1989 UPTC page 645 (SC). Apex Court upheld the validity of amendment and further held that 'Sale Tax Laws' passed by the Legislatures of States levying taxes on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract are subject to the restrictions and condition mentioned in each clause or sub clause of Article 286 of the Constitution of India.
10. Matter relating to levy of tax on the value of the goods involved in the execution of works contract further came up for consideration before the Constitution Bench of the Apex Court in the case of Gannon Dunkerley & Co. v. State of Rajasthan reported in 1993 UPTC 416.
11. Apex Court concluded as follows:-
(1) In exercise of its legislative power to impose tax on sale or purchases of goods under entry 54 of the State List read with Article 366(29-A)(b), the State Legislature, while imposing a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract is not competent to impose a tax on such a transfer (deemed sale) which constitutes a sale in the course of inter State trade or commerce or a sale outside the State or a sale in the course of import or export.
(2) The provisions of Sections 3, 4 and 5 and Sections 14 and 15 of the Central Sales Tax Act, 1956, are applicable to a transfer of property in goods involved in the execution of a works contract covered by Article 366(29-A)(b).
(3) While defining the expression "sale" in the sales tax legislation, it is open to the State Legislature to fix the situs of a deemed sale resulting from a transfer falling within the ambit of Article 366(29-A)(b) but it is not permissible for the State Legislature to define the expression "sale" in a way as to bring within the ambit of the taxing power a sale in the course of inter State trade or commerce, or a sale outside the State or la sale in the course of import and export.
(4) The tax on transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract falling within the ambit of Article 366(29-A)(b) is leviable on the goods involved in the execution of works contract and the value of the goods which are involved in the execution of works contract would constitute the measure for imposition of the tax.
(5) In order to determine the value of the goods which are involved in the execution of a works contract for the purposes of levying the tax referred to in Article 366(29-A)(b), it is permissible to take the value of the works contract as the basis and the value of the goods involved in the execution of the works contract can be arrived at by deducting expenses incurred by the contract or for providing labour and other services from the value of the works contract.
(6) The charges for labour and services which are required to be deducted from the vale of the works contract would cover (i) labour charges for execution of the works, (ii) amount, paid to a sub Contractor for labour and services, (in) charges or obtaining on hire or otherwise machinery and tools used for execution of the works Contract, (i\) charges for planning, designing and architect's fees and (v) cost of consumables used in the execution of the the works contract. (vi)out of establishment of the contractor to the extent it is relatable to supply to supply of labour and services. (vii) other similar expenses relatable to supply of labour and services and (viii) profit earned by the contractor to the extent it is relatable to supply of labour and services.
(7) To deal with cases where the contractor does not maintain proper accounts or the account books produced by him are not found worthy of credence by the assessing authority the legislature may prescribe a formula for deduction of cost of labour and services on the basis of a percentage of the value of the works contract but while doing so it has to be ensured that the amount deductible under such formula does not differ appreciably from the expenses, for labour and services that would be incurred normal circumstances in respect of that particular type of works contract. It would be permissible for the Legislature to prescribe varying scales for deduction on account of cost of labour and services for various types of works contracts , (8) While fixing the rate of tax it is permissible to fix a uniform rate of tax for the various goods invoked in the execution of a works contract which rate may be be different from the rates of tax fixed in respect of sales or purchase of those goods as as a separate aticle."
12. Apex Court further held as follows:-
"40- On behalf of the State it has been seriously contended that a deemed sale resulting from transfer of property in goods invoked in the execution of a works contract can never be a sale in the course of inter State trade or commerce and it cannot be an outside sale or a sale in the course of import since the transfer of property in the goods takes place only at the stage when the goods are incorporated in the works and that can take place only in the State where the work is required to be executed. On behalf of the contractors, on the other hand, it has been urged that a works contract can involve transactions constituting a sale in the course of inter State trade and commerce as well as lan outside sale of sale in the course of important and that is a matter which will have to be considered in accordance with the principles contained in Section 3, 4 and 5 of the Central Sales Tax Act keeping in view the terms and conditions of the particular contract. In this regard, the learned Counsel have placed reliance on a number of decisions of this Court wherein the provisions of Sections 3 and 4 of the Central Sales Tax Act, 1956, have been considered We do not propose to go into this controversy because, the question whether a deemed sale resulting from transfer of property in goods invoked in the execution of a particular works contract amounts to a sale in the course of linter State trade or commerce under Section 3 of the Central Sales tax Act or an outside sale under Section 4 of the Central Sales Tax Act or a sale in the course of import under Section 5 of the Central Sales Tax Act has to be decided in the light of the particular terms of the works contract and it cannot be decided in the abstract. As at present advised we are not in a position to say that in no case, can there be a sale in the course of linter State trade or commence or an outside sale or a sale in the course of import in respect of a deemed sale resulting from transfer of property in goods involved in the execution of a works contract falling within the ambit of sub Clause (b) of Clause (29-A) of Article 366 of the Constitution.
"41- It must therefore, be held that while enacting a law imposing a tax on sale or purchase of goods under Entry 54 of the State List read with sub Clause (b) of Clause (29-A) of Article 366 of the Constitution, it is not permissible for the State Legislature to make a law imposing tax on such a deemed sale which constitutes a sale in the course of inter State trade or commerce under Section 3 of the Central Sales Tax Act or an outside sale under Section 4 of the Central Sales Tax Act or sale in the course of import or export under Section 5 of the Central Sales Tax: Act. So also it is not permissible for the State Legislature to impose a tax on goods declared to be of special importance in inter State trade or commerce under Section 14 of the Central Sales Tax Act except in accordance with the Section 14 of the Central Sales Tax Act except in accordance with the restrictions and conditions contained in Section 15 of the Central Sales Tax Act."
"43. It has been contended on behalf of the contractors that while it is permissible for the State Legislature to define the expression 'sale' in the sales tax legislation to include transfer of property in goods involved in the execution of a works contract it is not permissible for the State Legislature to locate the situs of such sale in a manner as to treat a sale in the course of inter State trade or commerce or a sale outside the State or a sale in the course of import and export, as a sale inside the State and thereby assume the power to impose a tax on sales which are actually sales in the course of inter State trade or commerce or outside sales or sales in the course of import and export. In this regard, it may be stated that so far as sales in the course of inter State trade or commerce are concerned the position is well settled that the situs of the sale or purchase is wholly irrelevant as regards its inter State character, See Bengal Immunity Co. Ltd. v. State of Bihar (1955) 6 STC 446 (SC) at 481: (1955) 2 SCR 603 at 650). In Onkarlal Nandlal v. State of Rajasthan (1985) 60 STC 314 (SC): 1985 Suppl. 3 SCR 1075, it has been observed:
"There is, in our opinion no antithesis between a sale in the course of inter State trade or commerce and a sale inside the State. Even an inter State sale must have a situs and the situs may be in one State or another. It does not involve any contradiction in saying that an inter State sale or purchase is inside a State or outside it."
"44. The location of the situs of the sale in sales tax legislation of the State would, therefore, have no bearing on the chargeability of tax on sales in the course of inter State trade or commerce since they fall outside the field of legislative competence of the State Legislatures and will have to be excluded while assessing the tax liability under the State legislation. The same is true of sales which are outside the State and sales in the course of import and export. The State Legislature cannot so frame its law as to convert an outside sale or a sale in the course of import and export into a sale inside the State. The question whether a sale is an outside sale or a sale inside the State or whether it is a sale in the course of import or export will have to be determined in accordance with the principles contained in Section 4 and 5 of the Central Sales Tax Act and the State legislature while enacting the sales tax legislation for the State cannot make a departure from those principles.
13. It is mentioned here that initially when Section 3F was introduced, transactions covered under Sections 3, 4 and 5 of the Central Sales Tax Act have not been excluded. Thus, the provisions has been declared ultra-vires by the Division Bench decision of this Court in the case of V.K. Singha v. State of U.P. reported in 1995 UPTC page 337. Thereafter, Section 3-F has been re-introduced in 1995 by Act No.31 of 1995 with retrospective effect under the new amended Section 3-F of the Act transactions relating to Section 3, 4 and 5 of the Central Sales Tax Act have been excluded. Amended Section 3-F of U. P. Trade Tax Act reads as follows:-
"Section 3-F of U. P. Trade Tax Act- Tax on the right to use any goods or gods involved in the execution of works contract-(l) Notwithstanding anything contained in Section 3A or Section 3-AAAA or Section 3-D but subject to the provisions of Sections 14 and 15 of the Central Sales Tax Act, 1956, every dealer shall, for each assessment year, pay a tax on the net turnover of-
(a) transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration; or
(b) transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract.
At such rate not exceeding fifteen percent as the State Government may, by notification, declare and different rat4es may be declared for different goods or different classes of dealers.
(2) For the purposes of determining the net turnover referred to in Sub section (1), the following amounts shall be deducted from the total amount received or receivable by a dealer in respect of a-
(a) (transfer referred to in clause (a) of Sub-section (1) whether such transfer was agreed to during that assessment year or earlier-
(i) the amount representing the value of the goods covered by Section 3, 4 and 5 of the Central Sales Tax Act, 1956
(ii) the amount representing the value of the goods exempted under Section 4;
(iii) the amount received as penalty for default in payment or as damages for any loss or damage cause to the gods by the person to whom such transfer was made-
(b) transfer referred to in Clause (b) of Sub-section (1)-
(i) the amount representing the value of the goods covered by Section 3, 4 and 5 of the Central Sales Tax Act, 1956-
(ii) the amount representing the value of the goods exempted under Section 4;
(iii) the amount representing the value of the goods on the sale or purchase where of tax has been levied or is leviable under this Act at some earlier stage;
(iv) the amount representing the value of the goods manufactured in a new unit exempted under Section 4A or Section 4-AAA;
(v) the amount representing the value of the goods supplied to the contractor by the contractee.
Provided that the ownership of such goods remains with the contractee under the terms of the contract;
(vi) the amount representing the labour charges for the execution of the works contract;
(vii) all amounts paid to the sub contactors as the consideration for execution of the works contract, whether wholly or in part;
Provided that no deduction under this sub clause shall be allowed unless the dealer claiming deduction produces proof that the sub contractor is a registered dealer liable to tax under this Act and that such amount is included in the return of turnover filed by such sub contractor under the provisions of this Act; And that such amount is included in the return of turnover filed by such sub contractor under the provisions of this Act;
(viii) the amount representing the charges for planning, designing and architects fees;
(ix) the amount representing the charges for obtaining on hire or otherwise machinery and tools used for execution of the works contract;
(x) the amount representing the cost of consumables used in the execution of the works contract, the property in which is not transferred in the execution of the works contract;
(xi) the amount representing the cost of establishment and other similar expenses of the contractor to the extent it is relatable to supply of labour and services;
(xii) the amount representing the profit earned by the contractor to the extent it is relatable to the supply of labour and services;
(3) Where in respect of a transfer referred to in clause (b) of Sub-section (1), the contractor does not maintain proper accounts or the accounts maintained by him are not found by the assessing authority to be worthy of credence and the amount actually incurred towards charges for labour and other services and profit relating to supply of labour and services are not ascertain able, such charges for labour and other services and such profit may, for the purposes of deductions under clause (b) of Sub-section (2) be determined on the basis of such percentage of the value of the works contract as may be prescribed and different percentages may be prescribed for different types of works contract).
14. In the case of Sahney Steel & Press Works Ltd. and another v. Commercial Tax Officer & Ors. reported in UFFC, 1986 page 105 and in the case of Union of India and Ors. v. M/s K.G.Khosla & Company (P) Ltd. and Ors. others, reported in 1979 UPTC, 751, Apex Court held that it is immaterial whether a complete sale proceeds the movement of goods or follows the movement of goods or for that matter takes place while the goods are in transit. What is important is that the movement of the goods and the sale must be inseparably connected. In the case of C.S.T and Ors. v. Bakhtawar Lal Kailash Chand Arhti, reported in 1992 UPTC, 971, Apex Court held as follows.
"Sri Sehgal, learned counsel for the State of Uttar Pradesh contended that the purchases made by the respondent-dealer in the State of U.P. were completed purchases. Once a purchase is complete in the State of Uttar Pradesh, he contends, it is immaterial whether the goods are later despatched to another State or sold within the State. For the purpose of the U.P. Sales Sax Act, it is enough that a sale or purchase takes place within the State: the subsequent movement of the goods is irrelevant, says the counsel. We find it not possible to agree. As held by Mathew, J. in Oil India Co. Ltd. v. Superintendent of the Taxes and Ors. 1975 UPTC 335: 1975 (3) SCR 797, quoted approvingly in Khosla and Co., "a sale which occasions the movement of goods from one State to another is a sale in the course of the inter-State trade, no matter in which State the property in the goods passes." Even if the goods move in pursuance of an agreement of sale and the sale is completed in the State in which the goods are received, it will be an inter-State sale, as explained by this Court in Balabhags Hulaschand v. State of Orissa, 1976 UPTC.230: 1976 (2) SCT,939."
Sri Sehgal relies particularly upon "Case No. III" contained in the first extract and clause (iii) mentioned in the second extract Relying upon these statements, the learned counsel contends that a concluded sale must necessarily take place in the other State and not in the State from which the goods emanate. According in him a concluded or a completed sale must follow the movement of goods and should not precede. If a purchase or sale is complete in the State from which the goods emanate, he says it can never be an inter-State purchase or sale. We cannot accede to this understanding of the learned counsel. The said observations, no doubt rather widely worded, must be understood in the context of the question that arose for consideration in that case viz., whether an agreement of sale is included within the definition of "sale" as defined in the Central Sales Tax Act. Be that as it may, the true position has since been explained in the later decision in Khosla and Co. It is immaterial whether a completed sale precedes the movement of goods or follows the movement of goods, or for that matter, takes place while the goods are in transit. What is important is that the movement of goods and the sale must be inseparably connected. The ratio of Balabhagas is this: if the goods move from one State to another in pursuance of an agreement of sale and the sale is completed in the other State, it is an inter-State sale. The observations relied upon by Sri Sehgal do not constitute the ratio of the decision and cannot come to the rescue of the appellant State. Indeed, if one looks to the language employed in clause (a) of Section 3 it seems to suggest that the movement of goods follows upon and is the necessary consequence of the sale or purchase, as the case may be and not the other way round."
15. In the present case, facts are not in dispute, namely that the goods have been imported from outside the State of U. P. for use in the execution of works contract. The relevant terms which is referred by the Tribunal in its order are reproduced below:-
"(i) The goods to he supplied and used in the work contract, are to be produced only from those manufacturers which are approved by Cone/Contraction as per condition No. 12.19 of the tender document.
(ii) The goods to be procured from such manufacturers are necessarily to be inspected by the inspection body (RITES) of the contracts at the site of manufacturers, for which inspection fee is paid by Indian Railways to RITES as per condition No. 2, 4.5 of the Tender Document.
(iii) Specific Railway Identification codes would be assigned by Contracts as per the drawing and Deep Railway Identification Codes have to be embossed on individual goods at the time of manufacturing by the manufacturers.
(iv) The despatches of the goods duly inspected by RITES are made by the manufacturers vide their invoices alongwith RITES inspection Certificates which mention the description of goods, quantity, R. L. and paying authority as Indian Railway.
(v) The material despatched by the manufacturers will be delivered at the Depot of appellant on behalf of Railway in presence of Railway's Representatives. The Material received Certificate (MRC) shall he signed by appellant/Railway contractee.
(vi) The contractee/India Railway will make the payment of the material to the contractor after obtaining the indemnity bond from the appellant for the safe custody of material on railway's behalf."
16. In view of above terms, goods used in the works contract, were to be procured only from those manufacturers who were approved by Cone Contraction as per the condition No. 12.19 of the tender document and such goods were necessarily to be inspected by the inspection body (RITES) of the contractee at the site of manufacturers. Specific Railway Identification Codes was to be assigned by the Contractee as per the drawing and Deep Railway Identification Codes have to be embossed on individual goods at the time of manufacturing by the manufacturers. Goods were to be despatched by the manufacturers against their invoices alongwith RITES Inspection Certificate mentioning the description of goods, quantity. R. L. number, in the presence of Railways Representative. The goods were ordered, manufactured, imported and used as per the aforesaid terms of the contract. The aforesaid terms of contract clearly shows that at the tune of movement of goods lien of Indian Railway was created on the goods and it was known that the goods was being imported for use in the works contract, thus such transactions are clearly covered by Section 3 of the Central Sales Tax Act.
17. In the case of Santosh & Company v. C. T.T. reported in 1999 (supra), this Court held as follows:-
"l4- It is not disputed that the aforesaid items of goods were moved from the State of Delhi into the State of U. P. in pursuance of the contract that was awarded to the revisionist by the Garrison Engineer. Dehradun for supplying and fixing of aluminum doors, windows, ventilators and fixed glazed partition etc. It is also admitted that the goods that were so transported from Delhi consisted of the materials required for the fabrication of the doors, windows etc. Therefore, the movement of goods from one State to another i.e. from Delhi to U. P. Section 3-F of the U. P. Trade Tax Act under which the assessment were made, was amended and a new Section 3-F was substituted by Act 31 of 1995 with retrospective effect from 13.9.1985. Sub Section (2) of Section 3-F provides the manner in which the turnover in respect of transfer of property in goods involved in the execution of a works contract shall be determined. Sub-clause (i) of Sub-clause (b) of Sub-section (2) of Section 3-F provides that the amount representing the sale value of the goods covered by Sections 3, 4 and 5 of the Central Sales Tax Act, 1956 shall be deducted from the total amount received or receivable by a dealer in respect of a works contract. Patently the assessing officer as well as the appellate authorities including the Tribunal have not dealt with the matter in the light of the amended provisions, of Section 3-F and the entire payments received from the Garrison Engineer has been treated as the taxable turnover. Sub-clause (vi) of Section 3-F (2) provides for the exclusion of the labour charges also and there are other clauses as well which deal with the various other items of expenditure.
"5- As regards the goods brought in by the dealer from Delhi and on which the Central Sales Tax was already paid, the authorities below have tried to clinch the issue in favour of the revenue by saying that since the works were executed at Dehradun the sale was finally completed there and, therefore, the value of such things was also taxable. This contention is not correct and the law specifically provided for exclusion of goods which are the subject matter of inter State trade or the subject of a sale outside the State or the sale in the course of export of import and are, thus, covered by Sections 3, 4 and 5 of the Central Sales Tax Act. Admittedly, the goods were brought from Delhi to the State of U. P. in pursuance of and for the execution of the works contract and, therefore, they were covered by Section 3 of the Central Sales Tax Act and the sale value thereof could not have been subjected to trade tax under the U. P. Sales Tax Act. The fact that the sale was ultimately completed in U. P. was of no consequence, as held by the Hon'ble Supreme Court in Oil India Limited v. Superintendent of Taxes, 1975 UPTC 335."
18. Issue involved is squarely covered by the decision of this Court in the case of Santosh & Company v. C. T.T. reported in 1999 NTN (15) page 604. S. L. P. against the said order was dismissed by Apex Court.
19. The aforesaid decisions of Apex Court, clearly held that situs where the title of goods passed is wholly irrelevant. It is immaterial whether a complete sale proceeds, the movement of goods or follows the movement of goods or for that matter takes place while the goods are in transit. What is important is that the movement of goods in pursuance of prior contract of scale and both the movement of goods and sale must be inseparably connected. In the present case, it is seen that before the movement of goods, contract of sale was in existence and movement of goods was in pursuance of contract which were used in the works contract therefore, transaction was covered by the Section 3 of Central Safes Tax Act and the Tribunal has rightly held so.
20. For the reasons stated above. I do not find any error in the order Tribunal.
21. In the result, both the revisions fail and are accordingly, dismissed.