AP HC on Sales Tax on Goods moved from one state to other for execution of work contract

At the outset, it may be noted that consequent to the Constitutional amendment, levy of Sales Tax on the Works Contract came to be introduced in the State of Andhra Pradesh with effect from 01.07.1985. However, the definition of Sale in Section 2(g) of the CST Act was amended only with effect from 13.05.2002, by virtue of the amendment brought in the Finance Act 20/2002. In the present case, the Tribunal had examined the agreement dated 09.06.1991 and also the letter of intent dated 05.11.1990 issued in favour of the dealer by TWBC. The Tribunal also examined the specimen excise gate passes showing dispatch of goods from the factory at Yelahanka in Bangalore (Karnataka State) to the work spot of TWBC at Nellore (Andhra Pradesh State). The Tribunal has also recorded a finding that the dealer has entered into an agreement with TWBC at Yelahanka for the work entrusted to do and the goods were moved from Yelahanka to Nellore, and thereby the Works Contract came to be executed. The Tribunal found no supporting material which would advance the case of the Revenue that there was a stock transfer from the dealers Branch at Yelahanka to their office at Nellore. There was also no Form F filed by the dealer and it was never their contention that there was a stock transfer. The Tribunal had also taken into consideration of the affidavit filed by the Manager in-charge of the ultimate beneficiary M/s TWBC. In the light of the statutory provision bringing the execution of Works Contract, in CST only from 15.05.2002, the submission made on behalf of the dealer that no tax was liable to be paid, even in the State of Karnataka under the CST Act, is unassailable. The Tribunal, on appreciation of the facts, had come to a positive conclusion that the goods have moved consequent to the agreement for the execution of Works Contract and thus satisfying all the conditions of a transaction under the CST Act. In other words, as a matter of fact, the Tribunal found the transaction is the one which is required to be assessed under the CST Act and not under the APGST Act.

Andhra High Court

THE HONBLE SRI JUSTICE G. CHANDRAIAH AND

THE HONBLE SRI JUSTICE CHALLA KODANDA RAM

TAX REVISION CASE No. 52 of 2002

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