M/S Adarsh Insulation vs The C.T.O. Works And Leasing ...
2022 Latest Caselaw 3775 Raj

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Revision Petition No. 176/2016

M/s Adarsh Insulation, Bajaj Nagar, Udaipur

----Petitioner Versus The Commercial Taxes Officer, Works And Leasing Taxes, Udaipur

----Respondent Connected With D.B. Civil Revision Petition No. 175/2016 M/s Adarsh Insulation And Sons, Bajaj Nagar, Udaipur

----Petitioner Versus The Commercial Taxes Officer, Works And Leasing Taxes, Udaipur

----Respondent

For Petitioner(s) : Mr.Vivek Mathur.

For Respondent(s) : Mr.Sandeep Bhandawat.

HON'BLE MR. JUSTICE SANDEEP MEHTA HON'BLE MS. JUSTICE REKHA BORANA

Order

10/03/2022

The present petitions arise out of a common order and

hence, are being heard and decided together.

The brief facts stated by the petitioners are as under:

The petitioner-firms who undertake insulation contracts for

maintaining temperature of cement, pesticides and other similar

plants are registered under the RST/Rajasthan VAT Act in the

State of Rajasthan. On 07.01.2013 and 04.07.2013 respectively,

the Commercial Taxes Officer finalized the assessment of the

petitioner-firms for the assessment year 2010-11 under deemed

(2 of 4) [CR-176/2016]

assessment scheme introduced vide circular dated 10.04.2012

under Section 23(1) of the RVAT Act, 2003. Vide the said

assessment, an additional tax was charged @4% on the material

imported from out of the State and consumed in execution of the

works contract amounting to Rs. 67,82,834/- and Rs.4,64,066/-

respectively and thus, an additional demand of Rs. 33,914/- and

Rs.23,203/- was raised. Against the said assessment orders the

petitioners preferred appeals before the Appellate Authority which

were dismissed vide common order dated 11.12.2013 and the

second appeals against the same were also dismissed by the

Rajasthan Tax Board, Ajmer vide common order dated

15.06.2016. Against the order dated 15.06.2016, the present

revision petitions have been filed by the petitioners.

It has been submitted in the revision petitions that all

management and control, orders and payments, material handling

and entire business affairs of the firm are centralized outside the

State of Rajasthan, to be particular in the State of Gujarat, and as

such no tax is payable on such work contracts. It has further

been averred that in M/s Triveni Engineering and Industries

Ltd. Vs. State of Rajasthan & Ors. [2001(4) WLC 65],

Explanation (II) to Section 2(38) of the Rajasthan Sales Tax Act,

1994 (for short hereinafter referred to as, 'Act of 1994') had been

declared ultra vires by this Court and therefore, in view of the

ratio as laid down in M/s Triveni Engineering's case (supra), the

firm would not be liable to the said tax.

Per contra, it has been argued on behalf of the respondent

that after the judgment of M/s Triveni Engineering's case (supra)

being passed, an amendment in Section 2(g) of the Central Sales

Tax Act, 1956 has been introduced by the Central Government on

(3 of 4) [CR-176/2016]

11-05-2002. As a consequence of the said amendment, the

material imported from any place outside the State and used in

execution of the works contract within the State, would fall within

the definition of "Sale" and would therefore be liable to tax within

the State. Section 2(35) of the Act of 1994 reads as under:

"2(35) "Sale" with all its grammatical variations and cognate expressions means every transfer of property in goods by one person to another for cash, deferred payment or other valuable consideration and includes -

(ii) a transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract."

Heard the parties and perused the material available on

record.

A bare perusal of Section 2(35)(ii) clarifies that a transfer of

property in goods involved in the execution of the works contract

would fall within the definition of sale and therefore in terms of

the Act of 1994, would be taxable in the State of Rajasthan.

Moresoever, in the present matter the Appellate Authority has

reached to a specific finding that both the parties to the contract

i.e. the purchaser and the awarder belong to Rajasthan and

therefore, the ratio as laid down in M/s Triveni Engineering's case

(supra) would even otherwise not apply. It is clear on record that

the goods have been imported from outside the State of Rajasthan

and have been used in execution of the works contract and

therefore, the same would clearly amount to a sale which, in

terms of the provision of law, are taxable.

In view of the above facts, we do not find any ground to

interfere with the order passed by learned Deputy Commissioner

(4 of 4) [CR-176/2016]

(Appeal), Commercial Tax Department, Udaipur dated 11.12.2013

and order passed by Rajasthan Tax Board, Ajmer dated

15.06.2016.

The present revision petitions are therefore dismissed.

                                   (REKHA BORANA),J                                             (SANDEEP MEHTA),J


                                    69-T.Singh, Abhishek/-









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