Whether Supplies of Steel & Cement Constitutes a sale and liable to sales tax

2015-VIL-450-KAR
M/s KARNATAKA POWER CORPORATION LTD Vs STATE OF KARNATAKA
Karnataka Sales Tax Act – Sale – assessee supplies the contractor the iron & steel and cement for the purpose of construction and the cost thereof is deducted from the contract price – whether it constitutes a sale and liable to sales tax 
HELD – All the agreements between the assessee and the contractor, a standard clause that iron & steel and cement would be deducted from the contract price payable to the contractors is incorporated – The cost of those materials was deducted from the contract price payable to the contractors. Unless there is a liability on the part of the contractor to pay for those goods supplied, the question of deduction would not arise.
In order to maintain quality in the construction, if the assessee had taken steps for supplying materials by imposing a condition that the contractor shall not utilize the material for any purpose, except for the purpose for which it is supplied and deducted the cost of supplies from the contract price payable to the contractors does not in any way absolve the assessee from liability to pay the sales tax – Assessee petition dismissed‎