DODSAL ENGINEERING AND CONSTRUCTIONS PVT LTD, (FORMERLY M/S. DODSAL LIMITED) BWSSB PROJECT, TATAGUNI, KANAKAPURA ROAD, BANGALORE, REP BY ITS DIRECTOR Vs. COMMISSIONER OF COMMERCIAL TAXES, I FLOOR, VANIJYA TERIGE KARYALALA-I I CROSS, GANDHI NAGAR

JUDGEMENT

(1.) The appellant being aggrieved by the order dated 2-7-2009 made in KST/SMR/CR-4/2008-09 passed under Section 22-A of the Karnataka Sales Tax Act, 1957 by the Commissioner of Commercial Taxes, wherein the Commissioner has set aside the order passed by the Revisional Authority as well as the First Appellate Authority and restored the order passed by the Assessing Authority, has preferred this appeal for the assessment year 2000-01 and 2001-02

(2.) The appellant is a Limited Company incorporated under the Companies Act having its registered office at Bombay. The Appellant-company registered under the provisions of the Karnataka Sales Tax Act [hereinafter referred to as 'the Act'] is carrying on various types of works contract. The appellant, for the assessment years 2000-01 and 2001-02 had undertaken the works contract from the Bangalore Water Supply and Sewerage Board ('BWSSB' for short) for laying of Clear Water Transmission Mains for supply of water from Kaveri Water Supply Scheme, IV Stage. The appellantcompany had filed the annual returns of turnover for both the assessment years and paid the tax at 4% on taxable turnover claiming that the pipe laying work falls within Entry 20(ii) of the VI Schedule to the Act. Further, the appellant had claimed certain deductions including the payment to the Sub-Contractors as per the Rules. The returns filed by the appellant for the assessment years 2000-01 and 2001-02 were taken for verification and after verification of the books, the Assessing Authority disallowed certain deductions claimed by the appellant. In addition, the Assessing Authority treated the works executed by the appellant as a composite contract involving two or more of the above categories falling within Entry 44 of the VI Schedule. Further, the Assessing Authority had levied turnover tax under Section 6B of the Act. The Assessing Authority taking into consideration the fact that the assessee is not only laying the pipes but also undertaken some other civil works such as, construction of the pipe bridge over the Suvarnamukhi River, construction of the pedestal supports, anchor block, valve chambers for the pipe line including construction of the causeway across the river with approach road. Accordingly, held that the appellant has carried out composite contract involving two or more works. Accordingly assessed the tax as per the assessment orders dated 10-6-2003 and 10-7-2003 for the assessment years 2000-01 and 2001-02 respectively.

(3.) Being aggrieved by the assessment order dated 10-6-2003 and 10-7-2003 for the assessment years 2000-01 and 2001-02, the appellant preferred appeals before the Joint Commissioner of Commercial Taxes (Appeals) (hereinafter referred to as 'the First Appellate Authority') in KST.AP.Nos.118 & 149/2003-04 contending that works awarded to the appellant by BWSSB is for laying Clear Water Transmission Mains and the steel plates are provided to the appellant by the BWSSB at free of cost and the appellant has fabricated the steel pipe out of the steel plates supplied by the BWSSB and laid steel pipes as water transmission mains. Further excavating work, preparation of the trenches and back filling of trenches and construction of the bridges were only incidental and ancillary to the main contract of laying the Clear Water Transmission Mains. The predominant intention and nature of the contract is to lay the pipeline and it squarely falls within the Entry 20(ii) of the VI Schedule to the Act. The First Appellate Authority by its order dated 12-12-2003 allowed the appeal and held that the works contract carried on by the appellant clearly falls within the Entry 20(ii) of the VI Schedule and directed the Assessing Authority to reconsider the matter afresh. After remand, the Assessing Authority reconsidered the matter keeping in view the direction issued by the First Appellate Authority and by its order dated 12-1-2005 levied the sales tax at 4% on the taxable turnover, treating the works contract carried on by the assessee falls under Entry 20(ii) of the VI Schedule. Further, imposed the tax of 1% on the payment made to the sub- Contractors. Being aggrieved by the order dated 12-1-2005 levying turnover tax at the rate of 1% once again preferred an appeal before the First Appellate Authority in KST.Appeal Nos.510-511/2004- 2005. The First Appellate Authority allowed the appeal by its order dated 30-5-2005 wherein the First Appellate Authority directed the Assessing Authority to levy turnover tax on a portion of the payment made to the subcontractors pertaining to the transfer of the property in goods.