PANDIT BANARSI DAS BHANOT JABALPUR CONTRACTORS ASSOCIATION MADHYA PRADESH CONTRACTORS ASSOCIATION THE STATE OF MADHYA PRADESH THE ADVOCATE GENERAL FOR THE STATE OF PUNJAB Vs. STATE OF MADHYA PRADESH; SALES TAX OFFICER NAGPURS:STATE OF MADHYA PRADESHS; SALES TAX OFFICER NAGPURS:STATE OF MADHYA PRADESHS; SALES TAX OFFICER NAGPURS:STATE O

JUDGEMENT

(1.) These are appeals against the judgment of the High Court of Nagpur in writ applications filed by the appellants impugning the validity of certain provisions of the Central Provinces and Berar Sales Act No. XXI of 1947, hereinafter referred to as the Act, imposing sales-tax on materials used in construction works.

(2.) It will be convenient to refer to these provisions at this stage. Section 2 (b) of the Act defines "contract" as including "any agreement for carrying out for cash or deferred payment or other valuable consideration the construction, fitting out, improvement or repair of any building, road, bridge or other immovable property or the installation or repair of any machinery affixed to a building or other immovable property." Section 2 (c) of the Act defines "dealer" as including a person who carried on the business of supplying goods. In S. 2 (d), "goods" are defined as including "all materials, articles and commodities whether or not to be used in the construction, fitting out, improvement or repair of immovable property." Section 2 (g) defines "sale" as follows:

(3.) Acting on these provisions, the authorities constituted under the Act called upon the contractors within the State to furnish returns in respect of their receipts from contract works for the purpose of assessment of sales-tax, to which the appellants replied by instituting the proceedings, out of which the present appeals arise. The appellant in Civil Appeal No. 253 of 1955 is a contractor doing business in the construction of buildings and roads for the Military and Public Works Department in the State in Madhya Pradesh, and he filed M. P. No. 245 of 1954 challenging the validity of the assessment which the respondents proposed to make, on two grounds. He contended firstly that the Provincial Legislature had authority under Entry 48 of List II, Sch. VII of the Government of India Act, 1935, to impose tax only on sale of goods, that the supply of materials in works contracts was not a sale within that Entry, and that the provisions of the Act, which sought to impose a tax thereon treating it as a sale, were therefore ultra vires; and secondly that he was entitled to exemption under item 33 in Sch. II to the Act as enacted by Act XVI of 1949, and that the notification of the Government dated 18-9-1950 withdrawing that exemption was unconstitutional and void. To appreciate this contention, it is necessary to refer to Sec. 6 of the Act, which is as follows: 6 (1) "No tax shall be payable under this Act on the sale of goods specified in the second column of Schedule II, subject to the conditions and exceptions, if any, set out in the corresponding entry in the third column thereof.