2015-VIL-316-AP
M/s DINAKAR PROCESS Vs COMMISSIONER OF COMMERCIAL TAXES, ANDHRA PRADESH
Andhra Pradesh General Sales Tax Act, 1957 – Works Contract – Whether printing and supply of cine-wall posters is in the nature of works contract and, if so, could it be subjected to tax as deemed sale of goods under the APGST Act, 1957 and the Central Sales Tax Act, 1956 – Law as it stood for the years prior to 31.03.1995 – clause (29-A) of Article 366 of the Constitution – Entry 54 of the State List –
- HELD – While the subject transactions, undoubtedly, constitute a works contract as it is a composite contract of sale of goods and of labour and services, it is not all types of works contracts which could be subjected to tax under the APGST Act prior to 01.04.1995. By the use of the word means in the definition of works contract, under Section 2(t) of the APGST Act as it stood prior to 01.04.1995, the legislature intended to subject only such works contracts to tax under the APGST Act as were specified in Section 2(t) of the Act
- The latter part of the definition of “works contract”, as referred to in Section 2(t) of the APGST Act prior to 01.04.1995, dealt with movable property. The words used therein were “fitting out, improvement or repair of any movable property”. In order to bring any activity within the term “works contract’, the activity was required to fall within the ambit of any of these terms which were not defined or explained in the Act – The activity of manufacturing, printing and supply of cine wall-posters cannot be considered as failing under the terms fitting out, improvement or repair, as the supply of cine wall-posters is not a supply of goods which are fit and necessary; and there is no improvement or repair of the cine wall-posters printed and supplied by the appellants – Consequently these transactions did not constitute the specified works contracts referred to in Section 2(t), and were therefore not exigible to tax under the APGST Act during the relevant assessment years prior to 31.03.1995 – It is only after 13.05.2002 were works contracts included within the definition of sale under the CST Act. As the assessment years, to which these appeals relate, are long prior thereto, the subject transactions were not liable to tax either under the APGST Act or the CST Act – Assessee appeal allowed