Industrial Engineering Corporation Vs State of Tamil Nadu (Madras High Court)
Madras High Court held that work contracts undertaken prior to 11.05.2002 cannot be brought under the purview of the tax net under the Central Sales Tax Act, 1956. Accordingly, order set aside.
Facts- The petitioner is doing Industrial Engineering Services for various office clients and entered into a contract with the Government of India, Ministry of Defence, Directorate of Procurement, New Delhi, on 02.12.1999 and another contract with the Office of the Deputy Chief Electrical Engineer (Shops), South Central Railways, Secunderabad, on 27.09.1999.
The said work contracts had to be undertaken at Mumbai and Secunderabad respectively. When that being so, for the purpose of execution of the work contracts, necessary goods were supplied and the work contracts were undertaken by the petitioner at the respective places, namely, Mumbai and Secunderabad.
As per the definition of the word “sale” u/s. 2(g) of the Central Tax Act, 1956, amended vide Act 20 of 2002 with effect from 11.05.2002, the word “contract” has also been included and it has become taxable. However, the issue relating to the present lis is of the Assessment Year 1999-2000, that is well before 11.05.2002.
It is the case of the petitioner that those were work contracts, which have been undertaken outside the jurisdiction of the State of Tamil Nadu and since the work contracts were prior to the cutoff date of 11.05.2002, those kind of work contracts cannot be brought under the taxable purview within the meaning of “sale” as stipulated u/s. 2(g) of the Central Tax Act, 1956.
