K.K. Tated, J.

1. Heard the learned counsel for the rival parties.

2. This reference, at the instance of the Applicant/Revenue, is made by the Maharashtra Sales Tax Tribunal, Mumbai under Section 61(1) of the Bombay Sales Tax Act, 1959 vide its judgment dated 30th April, 2001 for the opinion of this Court on the following eight questions of law:-

i) Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the activity of the appellant does not amount to manufacture when it is carried out on goods supplied by its customers though the same activity amounts to manufacture if carried out on the appellants own goods

ii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law, in holding that the impugned activity is apparently falling within the description of sale under the Works Contract Act

iii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law, in holding that the activity which is declared as amounting to works contract, cannot be held as activity of manufacture under the Bombay Sales Tax Act, 1959

iv) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in the law in holding that the impugned goods have not been used for the manufacture of finished goods

v) Whether, on the facts and in the circumstances of the case and upon the true and correct interpretation of Section 13AA of the Bombay Sales Tax Act, 1959, as it existed during the relevant period, the Tribunal was justified in law, in holding that it will not be legal to hold that such purchases would qualify for the levy of purchase tax under the said section

vi) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the action of revision is not just and proper and in doing away the levy of purchase tax as made by the revision order

vii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law, in deleting the consequential levy of interest under Section 36(3)(b) of the Bombay Sales Tax Act, 1959

viii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the Miscellaneous Application requesting for enhancement of the purchase tax and the consequential interest will have to be rejected out of hand

3. While hearing this Reference we found that these eight questions of law referred by the Tribunal were overlapping, apart from the fact that some questions were repeated one after another. After hearing, both the parties agreed that the following two questions of law would resolve the entire controversy in the matter:-

(I) Whether in facts and circumstances of the case, the Tribunal was justified in holding that Respondents materials used in the job work of converting aluminium ingots into aluminium alloys by utilizing the raw materials supplied by its customers is not liable for levy of purchase tax under Section 13AA under the Bombay Sales Tax Act, 1959

(II) Whether in facts and in the circumstances of the case, the Tribunal was justified in deleting levy of interest under Section 36(3)(b) of the Bombay Sales Tax Act, 1959

FACTS

4. A few facts leading to this reference can be briefly summarized as under:-

The Respondent-Company is a registered dealer under the BST Act, 1959 and is also registered under the Works Contract Act. The Respondent is engaged in manufacturing of nonferrous alloys and simultaneously also undertakes the works-contract in making non-ferrous alloys out of the materials supplied by the customers. Mostly aluminium alloys are manufactured on works-contract basis. Aluminium is supplied by the customers. Some more materials such as silicon and copper are required in small quantities for carrying out the works-contract and the same is added by the Respondent for making aluminium alloy. This activity, was held by the Assessing Authority vide its assessment order dated 21.10.1991, as manufacturing process for the assessment period from 01.04.1988 to 31.03.1989 and the purchase tax under Section 13AA was levied at Rs.2,98,453/- by applying proportionate ratio method. Consequential additional tax and interest under Section 36(3)(b) of the BST Act, 1959 were also levied.

5. Being aggrieved by the aforesaid assessment order dated 21.10.1991, the Respondent-Assessee preferred the first appeal before the Deputy Commissioner (Appeals) contending that the impugned activity is covered under the Works Contract Act and hence, there is no occasion attracting levy of the purchase tax under Section 13AA of the BST Act, 1959. The Deputy Commissioner (Appeals) vide his order dated 31.03.1993 accepted the contentions of the Respondent-Assessee and deleted the purchase tax levied under Section 13AA of the BST Act, 1959 and also consequential additional tax and interest under Section 36(3) (b).

6. The aforesaid order dated 31.03.1993 passed in the first appeal was examined by the Additional Commissioner who noticed that the relief granted by the Deputy Commissioner (Appeals) deleting the purchase tax was wrong. Hence, an action under Section 57 of the BST Act, 1959 was taken and levy of the purchase tax under Section 13AA along with consequential levy of additional tax and interest was restored by the Additional Commissioner vide its order dated 10.01.1996.

7. Being aggrieved by the aforesaid order dated 10.01.1996, the Respondent/Assessee preferred Appeal No. 30/1996 before the Maharashtra Sales Tax Tribunal, Mumbai. The Tribunal vide its judgment dated 18.10.1997 came to the conclusion that the impugned goods have not been used for manufacturing the finished goods and in fact these have been used for carrying out the transaction falling under the Works Contract Act. The Tribunal held that since there is no manufacturing process involved it will not be legal to hold that such purchase would qualify for levy of purchase tax and accordingly, it deleted the purchase tax as also the interest levied under Section 36(3)(b) of the BST Act, 1959.

8. Being aggrieved by the aforesaid order dated 18.10.1997, the Applicant/Revenue preferred the Reference Application No.20/1998 under Section 61(1) of the BST Act, 1959 and the Tribunal vide its judgment dated 30.04.2001 referred the above mentioned questions of law for the opinion of this Court.

SUBMISSIONS

9. Mr.Sonpal, learned A Panel counsel appearing for the Applicant-Revenue submitted that the Respondent is engaged in manufacture of nonferrous alloys and it also undertakes the works-contract for manufacturing the nonferrous alloys out of the materials supplied by the customers. In executing the works-contract wherein aluminium is supplied by the customers and other ingredients like silicon and copper belonging to the Respondent are used. Thus, the copper and silicon are added by the Respondent for making aluminium alloys and therefore, this activity is nothing but manufacturing process and therefore, the purchase tax under Section 13AA of the BST Act, 1959 attracts in the present case. Section 13AA of the BST Act, 1959 for the relevant period from 01.07.1982 to 31.08.1990 reads thus:-

Section 13AA: Purchase tax payable on goods in Schedule C, Part I, when manufactured goods are not sold.

(1) Where a dealer, who is liable to pay tax under this Act, purchases any goods specified in Part I of Schedule C, directly or through Commission agent, from a person who is or is not a Registered Dealer and uses such goods in the manufacture of taxable goods, then, unless the goods so manufactured are sold by the dealer, there shall be levied, in addition to the sales tax, paid or payable, if any, or as the case may be, the purchase tax levied or leviable, if any, under the other provisions of this Act in respect of purchases of such goods, a purchase tax at the rate of two paise in the rupee on the purchase price of the goods, so used in the manufacture, and accordingly the dealer shall include purchase price of such goods in his turnover of purchases in his return under section 32, which he is to furnish next thereafter.

10. Mr.Sonpal further submitted that whenever the Respondent is doing works-contract for their customers they are using certain quantity of silicon and copper as without that it is not possible for them to do the same. He further submitted that on perusal of Section 13AA of the BST Act, 1959 in order to attract tax under this Section, the following are the requirements:-

(1) Dealer liable to pay tax under the BST Act, 1959;

(2) Purchases of goods covered by Schedule-C Part-I;

(3) Use of such goods in the manufacture of taxable goods;

(4) Non sale of goods so manufactured would results in levy of purchase tax under Section 13AA of the BST Act, 1959.

11. According to Mr.Sonpal, a dealer treated himself as manufacturer of aluminium alloy wherein all raw materials belonged to him. Therefore, even in case some material is supplied by the buyer and part of the material was used by the Assessee should also be treated as a manufacturer for the purpose of the BST Act, 1959. The word manufacture has been defined under Section 2(17) of the BST Act, 1959 which reads as under:-

2(17) manufacture, with all its grammatical variations and cognate expressions, includes:-

(a) producing, making, extracting, altering, ornamenting, finishing or otherwise processing, treating or adapting any goods, or using or applying any such process, as the State Government may, having regard to the impact thereof on any goods or to the extent of alteration in the nature, character or utility of any goods brought about by such process, by notification in the Official Gazette, specify;

(b) cutting, sawing, shaping, sizing or hewing of timber; and

(c) refining of oil;

(d) Lacquering of Polyester Film.

But does not include such manufacture or manufacturing process, as may be prescribed.

12. Mr.Sonpal further submitted that at the time of carrying out the contract job works it is necessary for the Respondent to use some silicon and copper. The Respondent is charging for the said materials to its customers. He further submitted that the amount of works-contract also included the cost of material used by the Respondent in carrying out the contracts and therefore, it amounted to sale of material used by them for carrying out the manufacturing process. Therefore, according to him, the Respondent is liable to pay the purchase tax under Section 13AA of the BST Act, 1959. He further submitted that the activities under the Works Contract Act and the BST Act, 1959 were altogether different and the statutes providing tax liability on the Assessee were also altogether different and, therefore, the Assessees could not take a plea that once they were charged under the Works Contract Act then they could not be held liable to pay under the BST Act, 1959 for the same transaction. He further submitted that both these Acts simultaneously provided the tax liability on the Respondent-Assessee and therefore, they were liable to pay the same. He further submitted that the Respondent-Assessee used their material for completing the works-contract on behalf of their customers and therefore, to the extent of materials used by them, amounted to sale and thus, they were liable to pay purchase tax under Section 13AA of the BST Act, 1959.

13. Mr.Sonpal further submitted that the word manufacturer has wider connotation in fixing tax liability on the Assessee. According to him, the Apex Court in the matter of M/s B.P. Oil Mills Vs. Sales Tax Tribunal and others reported in 1998(3) STC 188 held that where any commodity is subjected to a process or treatment with a view to its development or preparation for the market, it would amount to processing. Paragraph No.7 of the judgment reads thus:-

7. Two expressions manufacture and manufacturer are also relevant in the context. The expression manufacture is defined in clause (e1) and the expression manufacture is defined in clause (ee) of Section 2 of the. Manufacture is defined to mean producing, making, mining, collecting, extracting, altering, ornamenting, finishing or otherwise processing, treating or adapting any goods; not including such manufactures or manufacturing processes as has been prescribed; and manufacturer, in relation to any goods is defined to be a dealer who makes the first sale of such goods in the State after their manufacture and includes a dealer who sells bicycles in completely knocked down form.

Proviso to clause (e) of subsection (1) of section 3A of theempowers the State Government to, from time to time by notification, modify the rate or point of tax in respect of any such goods, with effect from such date as may be notified in that behalf, so, however, that the rate does not exceed eight per cent.

In view of this authority, Mr.Sonpal submitted that in the present case the Respondent-Assessee is using its own materials at the time of carrying out the works-contract and therefore, the same amounts to a manufacturing activity.

14. Mr.Sonpal, learned counsel for the Revenue further relied on the judgment in the matter of the Commissioner of Sales Tax Vs. Radha Dying & Printing Mills reported in 1981(48) STC 61. In this case, while deciding the issue whether a dealer buying grey clothes, dying and printing it and selling it and also dying and printing clothes of others amounts to a manufacturing activity. Head-note of the said judgment reads thus:-

The expression manufacture is defined in Section 2(17) of the Bombay Sales Tax Act, 1959 and in view of the provisions of Section 20 of the Bombay General Clauses Act, 1904, not only the expression manufacture in entry 39 of Notification No.STA.1059-(iii)-G-1 dated 28th December, 1959, issued under Section 41(1) of the Sales Tax Act but all cognate expressions must bear the same meaning of the expression manufacture as defined in section 2(17) of the Sales Tax Act.

Dyeing and printing would be a process carried out on cloth and would result in a new marketable commodity coming into existence. Therefore, dyeing and printing cloth would be manufacture within the meaning of Section 2(17) of the Sales Tax Act.

For the purposes of entry 39 of notification dated 28th December, 1959 issued under Section 41(1) of the Sales Tax Act, manufacture for sale could be goods of the purchasing dealer himself or on behalf of some other person who gets his goods manufactured by the purchasing dealer for the purpose of sale.

15. Mr.Sonpal, learned counsel for the Revenue further submitted that in the present case undisputedly aluminium is converted into a aluminium alloys where the Assessee uses his own copper and silicon. This process results into manufacturing of a new product i.e. aluminium alloys. Therefore, according to him, the Respondent-Assessee is liable to pay tax under Section 13AA of the BST Act, 1959. On the basis of these submissions, Mr.Sonpal urged that this Court may hold that the activity carried out by the Respondent-Assessee amounts to a manufacturing activity and thus, they are liable to pay purchase tax under Section 13AA of the BST Act, 1959 as well as interest under Section 36(3)(b).

PER CONTRA

16. Mr.Joshi, learned counsel appearing for the Respondent-Assessee submitted that the Respondent-Assessee was manufacturing nonferrous alloys on its own materials. It also undertook job works of converting aluminium of the customers into aluminium alloys by adding small quantity of silicon and copper to the aluminium supplied by the customers as per requirements of the customers. That activity of job work was statutorily determined to be an activity covered by a separate enactment providing for levy of sales tax on indivisible works contract. According to him, the Respondents were paying tax for their job works under the Works Contract Act and therefore, there was no question of imposing any tax under Section 13AA of the BST Act, 1959. He further submitted that it was clear from the definitions of a dealer, purchase price, sale, sale price, tax and turnover of purchases as defined under the BST Act, 1959 as well as under the Works Contract Act that the Assessee was not liable to pay tax as claimed by the Revenue in the present case. The definitions of a dealer, purchase price, sale, sale price, tax and turnover of purchases under both thes read thus:-

Bombay Sales Tax Act, 1959 - Sec.2(11): Dealer means any person who whether for commission, remuneration or otherwise carries on business of buying or selling goods in the State, and includes the Central Government, or any State Government which carries on such business, and also any society, club or other association of persons which buys goods from or sells goods to its members.

Sec.2(22): purchase price means the amount of valuable consideration paid or payable by a person for any purchase price include any sum charged for anything done by the seller in respect of the goods at the time of or before the delivery thereof, other than the cost of insurance for transit or of installation, when such cost is separately charged.

Sec.2(28): sale means a sale of goods made within the State for cash or deferred payment or other valuable consideration, and includes any supply by a society or club or an association to its members on payment of a price or of fees or subscription, but does not include a mortgage, hypothecation, charge or pledge; and the words sell, buy and purchase, with all its grammatical variations and cognate expressions, shall be construed accordingly.

Sec.2(29): sale price means the amount of valuable consideration paid or payable to a dealer for any sale made including any sum charged for anything done by the dealer in respect of goods at the time of or before delivery thereof, other than then cost of insurance for transit or for installation, when such cost is separately charged.

Sec.2(32): tax means a sale tax, turnover tax, purchase tax, or additional tax as the case may be, payable under this Act.

Sec.2(35): turnover of purchases means the aggregate of the amounts of purchase price paid and payable by a dealer in respect of any purchase of goods made by him during a given period, after deducting the amount of purchase price, if any, refunded to the dealer by the seller in respect of any goods purchases from the seller and returned to him within the prescribed period.

Works Contract Act - Sec.2(d) : Dealer means any person who, whether for valuable consideration, commission, remuneration or otherwise, transfer of property in goods involved in the execution of works contracts and includes any State Government and the Central Government which so transfers such property in goods, and any society, club, or association of persons which so transfers the property in goods to its members.

Sec.2(i): purchase price means the amount of valuable consideration paid or payable by a person for purchase of any goods in relation to execution of works contract, effected in the State in the course of inter State trade or commerce or in the course of import including any sum charged for any thing done by the seller in respect of the goods at the time of or before delivery thereof and will also include the cost of freight, transit or insurance and any taxes, duties, cesses and fees paid or payable in respect of such goods, whether charged separately or not.

Sec.2(1): sale means a transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract in the State, and the word sell with all its grammatical variation and cognate expressions shall be construed accordingly.

Sec.2(m): sale price means:-

(i) the amount of purchase price of the goods or, as the case may be, the value of the goods, brought or transferred from a place outside the State where such goods are sold in the same form in which they were purchased, brought or transferred; and

(ii) where the goods have been sold in the form other than the form in which they were purchased or as the case may be, brought or transferred from a place outside the State, then the purchase price of the goods or, as the case may be, the value of the goods brought or transferred from a place outside the State, and so sold.

Sec.2(n1): tax means the tax payable under this Act and includes a lump sum amount by way of composition payable in lieu of the amount of tax.

Sec.2(o): turnover of purchases means the aggregate of the amounts of purchase price paid or payable by a dealer in respect of purchase of any goods in relation to the execution of works contract, made by him during any period, after deducting the amount of purchase price, if any, refunded to the dealer by the seller in respect of any goods purchased from the seller and returned to him within the prescribed period.

17. Mr.Joshi, learned counsel for the Respondent-Assessee further submitted that 46th amendment to the Constitution of India in Article 366, Entry No.29(A) about tax on sale or purchase of the goods is added. Considering the said amendment also, the Respondent-Assessee is not liable to pay tax in addition to the tax paid by him under the Works Contract Act. Entry No.29A under Article 366 of the Constitution of India reads thus:-

(29A) tax on the sale or purchase of goods includes

(a) a tax on the transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration;

(b) a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract;

(c) a tax on the delivery of goods on hire- purchase or any system of payment by instalments;

(d) a tax on the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration;

(e) a tax on the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration;

(f) a tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made;]

18 Mr.Joshi, learned counsel for the Respondent-Assessee also pressed into service the judgment of the Apex Court in the matter of Builders Association of India and others Vs. Union of India and others, reported in 1989 (73) STC 370. [LQ/SC/1989/199] In this case, the Apex Court considered the amendment enlarging definition to include a deemed transfer of property in the goods involved in the works contract etc. by which Entry No.29(A) was introduced in the Central Sales Tax Act. In this judgment, the Apex Court held thus:-

We, therefore, declare that sales tax laws passed by the Legislatures of States levying taxes on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract are subject to the restrictions and conditions mentioned in each clause or sub-clause of Article 286 of the Constitution. We, however, make it clear that the cases argued before and considered by us relate to one specie of the generic concept of works contracts. The case book is full of the illustrations of the infinite variety of the manifestation of works contracts. Whatever might be the situational differences of individual cases, the constitutional limitations on the taxing power of the State as are applicable to works contracts represented by building contracts in the context of the expanded concept of tax on the sale or purchase of goods as constitutionally defined under Article 366(29A), would equally apply to other species of works contracts with the requisite situational modifications.

The constitutional amendment in Article 366(29A) read with the relevant taxation entries has enabled the State to exert its taxing power in an important area of social and economic life of the community. In exerting this power particularly in relation to transfer of property in goods involved in the execution of works contracts in building activity, in so far as it affects the housing projects of the under privileged and weaker sections of society, the State might perhaps, be pushing its taxation power to the peripheries of the social limits of that power and perhaps, even of the constitutional limits of that power in dealing with unequals. In such class of cases building activity really relates to a basic subsistential necessity. It would be wise and appropriate for the State to consider whether the requisite and appropriate classifications should not be made of such building activity attendant with such social purposes for appropriate separate treatment. These of course are matters for legislative concern and wisdom.

19. Relying on the judgment in case of Builders Association of India (supra), Mr.Joshi submitted that it is thus clear from the observations of the Apex Court that the Applicant cannot impose sales tax on the material used by the Respondent at the time of execution of works contracts. He further relied on the judgment of this Court in the matter of Commissioner of Sales Tax Vs. Auto Comp Corporation reported in 2009 (26) VST 30 (Bombay). In this case, the question arose before this Court was whether at the time of executing the works contract if the dealer is using steel plates supplied by the customer for manufacture of outer flange and its own material for inner flange then the transfer of property in materials used for production of inner flange in execution of contract for conversion of steel plates, amounts to sale under the Works Contract Act. In this case, it has been held that the steel plates belonged to the customer and the dealer only converted the steel plates into the assembly flange. In converting these steel plates into the assembly flange the dealer undoubtedly used some of its own materials but the contract of conversion of steel plates under the assembly flange was single and indivisible and the passing of the property in the goods of the dealer used in the conversion was incidental to the main contract which was the works contract. Passing of such property in the goods was not sale as defined under Section 2(28) of the Bombay Sales Tax Act, 1959. Relevant portion of the judgment reads thus:-

The main raw material is imported steel plates which are supplied by Telco. The steel plates belong to Telco and the respondent only converts the said steel plates into the assembly flange. In converting these steel plates into assembly flange the respondent undoubtedly uses some of its own material but the contract of conversion of steel plates under the assembly flange is single and indivisible and the passing of the property in the goods of the respondent used in the said conversion is incidental to the main contract which is the works contract. Obviously, passing of such property in the goods is not a sale as defined under Section 2(28) of the Bombay Sales Tax Act.

20. Mr.Joshi further submitted that at time of carrying out the works contract, whatever material is used on that, they are paying the taxes and therefore, for the same cause, the Applicant cannot impose the double tax one under the BST Act, 1959 and another under the Works Contract Act. In support of his contention, he relied on the judgment in the matter of Saf Yeast Company Pvt.Ltd. Vs. State of U.P. and another reported in (2009) 24 VST 152 (All). In this case, the Allahabad High Court held that the Government could not impose tax on the same cause of action under the different enactments. Paragraphs Nos.7 and 8 of the said judgment read thus:-

7. The learned counsel for the Petitioner submitted that the levy of administrative charges on the sale of molasses is a tax and as the petitioner is paying administrative charges on the purchase of the molasses from the sugar mills, the opposite parties cannot realise the trade tax under the provisions of the U.P. Trade Tax Act, 1948 on the same purchase of molasses. He further submitted that the honourable Supreme Court in the case of Commissioner of Central Excise, Meerut V. Kisan Sahkari Chinni Mills Ltd. reported in (2001) 6 SCC 697 [LQ/SC/2001/1807] has held that administrative charge levied by the State of U.P. under the provisions of the U.P. Sheera Niyantran Adhiniyam, 1964, on the sale and purchase of molasses is a tax. The learned counsel for the petitioner has also relied upon the decision of the honourable Supreme Court in the case of Commissioner of Central Excise, Lucknow, U.P. v. Chhata Sugar Co. Ltd. reported in (2004) 2 RC 614: (2004) 3 SCC 466 [LQ/SC/2004/302] . He further submitted that the honourable Supreme Court in the case of Gupta Modern Breweries v. State of Jammu and Kashmir reported in (2007) 8 RC 688 : (2007) 6 SCC 317 [LQ/SC/2007/528] has held that the administrative charges imposed is a tax and not a fee.

8. He further submitted that the special enactment will prevail over general enactment and as the U.P. Trade Tax Act is a general Act relevant to the levy of tax on sale and purchase of goods in the State of U.P. it will not apply to the petitioner in respect to the purchase of molasses from the Sugar factories as the sugar factory recovers administrative charges from the petitioner and passes them on to the Government under the special enactment i.e. U.P. Act No.24 of 1964. The learned counsel for the petitioner has relied upon the decision of the honourable Supreme Court in the cases of Belsund Sugar Co. Ltd. v. State of Bihar reported in (1999) 9 SCC 620 [LQ/SC/1999/704] , Govind Sugar Mills Ltd. v. State of Bihar reported in (1999) 115 STC 358 [LQ/SC/1999/748] : (1999) 7 SCC 76 [LQ/SC/1999/748] and Beg Raj Singh v. State of U.P. reported in (2003) 1 SCC 726 [LQ/SC/2002/1359] . He further submitted that in the case of D.S.M. Group of Industries v. Chairman, Trade Tax Tribunal, U.P. reported in (2002) UPTC 955, the honourable single judge of this Court has held that molasses is not taxable under the U.P. Trade Tax Act, 1948 and that the special Act will prevail over the General Act and the Special Leave Petition (C) No.8845 of 2002, State of U.P. v. D.S.M. Group of Industries against the said judgment was dismissed by the honourable Supreme Court by the judgment and order dated March 10, 2003.

21. Mr.Joshi submitted that in view of the above mentioned facts and circumstances it is crystal clear that the State Government has no authority to impose tax twice for the same cause of action under the different statutes. Not only that the material used by the Respondent at the time of carrying out the works contract is not taxable under the BST Act, 1959 as the Respondent pays the tax on the said material under the Works Contract Act.

CONSIDERATIONS:

22. We have carefully considered the rival submissions of the learned counsel for the parties. It is true that the position in regard to levy of tax on transfer of property in goods involved in execution of the works contracts has undergone a complete change with the 46th amendment of the Constitution of India and the enactment of the Maharashtra Sales Tax on the transfer of property in goods involved in execution under the Works Contracts Act, 1985 and reenactment thereof in the form of the 1989 Act by the State of Maharashtra. After the 46th amendment of the Constitution, the State Legislature has power to make law for levy of tax on the transfer of property in goods involved in execution of the works contracts. In exercise of that power, the State of Maharashtra enacted 1985 Act which was repealed by the 1989 Act from the date of its inception.

23. In the present case, the question arises: whether the State Government can impose tax under the Sales Tax Act in this case on the material used at the time of carrying out the works contract. In this case, the Respondent is engaged in manufacture of non-ferrous alloys and simultaneously also undertakes the works-contract in making nonferrous alloys out of the materials supplied by the customers. At the time of carrying out the works contract, the Respondent is required to add some material owned by it such as silicon and copper in small quantity. It is case of the Respondent that they are paying tax on material used in carrying out the works contract under the Works Contract Act and therefore, they are not liable to pay under the BST Act, 1959. Not only that the same is not within the sweep of clause 29A of Article 366 of the Constitution. Even the Apex Court in the matter of Builders Association of India (supra) considered this issue and held that the sales tax laws passed by the legislature of the State levying tax on transfer of property in the goods involved in execution of works contract are subject to the restriction and conditions mentioned in each clause or sub clause of Article 286 of the Constitution of India. Considering these observations of the Apex Court, we are of the opinion that the present case is clearly covered by the judgments of the Apex Court in the matter of Builders Association of India (supra) and Auto Comp Corporation (supra). It is common that whenever a contractor takes works contract like repairing of building and/or construction of building in which he has to use some quantity of his own material for completion of job. If contractor uses small quantity of its own material and same is transferred to the customer after completion of works contract it does not amount to sale of goods.

24. The scope of meaning of words cannot be so enlarged as to traverse the sense generally carried by the terms, though it may be restricted by legislation. It is especially so when such enlargement adversely affects the citizen visavis a government. Hence, the term sale of goods cannot even by force of a constitutional amendment include works contracts even if some sale may be inherent in the execution of such a contract.

25. That apart and after acknowledging validity of the 46th amendment in the Constitution, still the essential fact remains that the tax is only on sale of goods. The expression assigned to clause 29A of Article 366 of the Constitution of India cannot be so construed as to add anything to the existing concept of sale of goods. In fact even the present concept is wider than what the term actually warrants. The sub-clause only lays down that the tax on sale or purchase of goods includes a tax on the transfer of property in goods and nothing more. Obviously, it cannot affect those transfers that are made otherwise than by sale.

26. So, the 46th amendment does not bring into the purview of the tax anything that is not goods including the goods that have ceased to be goods having been used up in the fulfillment of works contracts.

27. Even if the goods used in works contracts remain identifiable and detachable, they have not been sold as goods because the principal function was fulfillment of the works contracts; the transfer of goods in original form being only incidental to it. As against this, in a contract for sale/purchase the principal factor is sale/purchase and it is contract that is incidental. The seller in such a contract is interested in selling while the buyer is interested in purchasing what is offered by the seller. The contract is a result of such desire on the part of both. In a works contracts, any transfer of property in goods that may result, cannot by any stretch of imagination be said to be sale.

28. It is to be noted that the definitions of dealer, purchase price, sale, sale price, tax, turnover purchase etc. given in the BST Act, 1959 and the Works Contracts Act have different meaning. They operate in different fields. A dealer under the BST Act means a person who, for the purpose of commission, remuneration or otherwise, does the work of purchasing or selling the goods. It is difficult to lay down a single or group of tests which can be called decisive to the intention of a person to carry on a business the activity which the person must indulge in is not merely the activity of selling in the sense of transferring property of goods, but it must be the activity of carrying on the business of selling or supplying goods. Whereas, a dealer under the Works Contracts Act means a person who executes the works contracts by taking the entire material from the owner for doing certain alterations and/or processes. It is, thus, clear that the definitions of dealer under both thes are altogether different. Under the BST Act a person and/or other establishment deals with the goods for sale and purchase whereas under the Works Contracts Act a person carries on the works contracts for their clients accepting their goods. With this understanding of the concept of the word dealer appearing in two different legislations, if one turns to the text of section 13AA of the BST Act, 1959, then one would find, it opens with the word where a dealer, who is liable to pay tax under this Act (i.e. BST Act, 1959) ..... Meaning thereby a dealer is that person who is known to be a dealer under the BST Act, 1959 and not under the Works Contracts Act. The Revenue wants to bring the Respondents-Assessees activities referable to the Works Contracts Act within the sweep of Section 13AA of the BST Act, 1959 which is not permissible in law considering the two different fields in which they are operating.

29. In similar way, the definitions of purchase price run in different way in both enactments. In BST Act, purchase price constitutes a consideration from one person to other person for change of ownership of goods in transaction between them; whereas under the Works Contracts Act, purchase price denotes valuable consideration paid by one person to another for carrying out/ completion of their work on contract basis.

30. In similar way, as per the definition of sale under the BST Act in order to constitute a sale it is necessary that there should be an agreement between the parties for the purpose of transferring title of goods which of course presupposes capacity to contract, that it must be supported by money consideration and that as a result of the transactions, property must actually pass in goods. A sale is completed by the seller or the provider of the goods or services to an acquisition or appropriation or request followed by the passing of title (property or ownership) in the item and the application and due settlement of a price, the obligation for which arises due to the sellers requirement to pass ownership, being a price he is happy to part with ownership of or any claim upon the item. Whereas the word sale as defined under the Work Contracts Act denotes a sale of services of contractor for completing the work contracts. The works contracts are not normal sale. In the normal sale there is a transfer of property in definite or ascertained goods. The goods remain same before and after the delivery of the goods. However, in works contracts it does not happen. The goods before the delivery and after the execution of works contracts are different, many times in different form also. For example, at the site of construction of a building, before the construction (work contract) commences, the goods like cement, steel, sand etc. are lying but after the construction a building (immovable goods) comes to an existence. In a contract of sale, the main object is the transfer of property and delivery of the possession to the buyer whereas no such thing happens in the works contract. This is the difference between the normal sale and the deemed sale in the indivisible works contracts.

31. In similar way, the word sale price in the BST Act denotes consideration payable by the purchaser to the owner whereas under the Works Contracts Act, sale price denotes a price of goods used at the time of carrying out the works contracts. Under the works contracts usually the goods changes its form after completion of works contract and for that the contractor charges mainly his labour charges along with other expenses including the price of small quantity of goods used by him while executing the works contracts.

32. It is, thus, clear from the above mentioned discussion that the definitions of the words dealer, purchase price, sale etc. operate differently in both enactments. They do not overlap on each other as such they cannot be made to overlap through the process of judicial interpretation. As such, submissions made by Mr.Sonpal do not hold water.

33. The authorities as stated herein above relied upon by Mr.Sonpal, learned counsel for the Applicant are also not applicable in the facts and circumstances of the present case.

34. The question that arises for consideration is whether in execution of job work of non-ferrous alloys, any transfer of property in the material used to do the said work i.e. silicon and copper is involved. We have given our careful consideration to this controversy. We, however, find it difficult to hold that in the execution of job work of non-ferrous alloys, there is any transfer of property in the silicon and copper. In fact silicon and copper is consumed in the process of manufacture of non-ferrous alloys and lose its identity as goods, no property can be said to pass in customer. There is, thus, no transfer of silicon and copper in execution of a works contract of non-ferrous alloys. What is taxable under the is the value of the goods get transferred to the customer in execution of works contracts either as goods in any other form and not the value of goods used or consumed in the execution of the works contracts, if such user or consumption does not result in transfer of property in those goods in any form to the customer.

35. In the above mentioned facts and circumstances of the case, we are of the opinion that the Tribunal has rightly held that since there is no manufacture process involved, it will not be legal to hold that such purchase would qualify for levy of purchase tax. Therefore, both the questions referred herein above are answered in favour of the Respondent/Assessee and against the Applicant/Revenue. The reference is, accordingly, disposed of.