MICROTROL STERILIZATION Vs. STATE OF KERALA

JUDGEMENT

(1.) THE question raised in the sales tax revision filed by the assessee is whether the Tribunal was justified in sustaining the assessment on the value of Ethylene Oxide used in sterilisation of goods for others. Assessee is engaged in sterilisation of goods with Ethylene Oxide. In the course of assessment for the year 2003 -04 the Assessing Officer noticed that substantial value of Ethylene Oxide brought from outside State on stock transfer was used up in the course of sterilisation work done by the assessee for various parties. He therefore assessed the contract receipts which includes value of ethylene oxide and service charges received as turnover for works contract. The assessee questioned the assessment on the ground that Ethlyene Oxide in the process of sterilisation is lost and therefore there is no transfer of property involved in the sterilisation process and, therefore, the value of the Ethylene Oxide cannot be assessed as turnover on works contract. The assessment was confirmed in the first appeal and in second appeal by the Tribunal. Hence this revision is filed against the Tribunals order.

(2.) WE have heard Shri. V.P. Sukumar appearing for the petitioner and the Govt. Pleader appearing for the respondent.

(3.) GOVT . Pleader on the other hand relied on the decision of this Court in Teaktex Processing Complex Limited v. State of Kerala (136 STC 435) and that of the Bombay High Court in Commissioner of Sales Tax v. Matushree Textile Ltd. (132 STC 539) and contended that turnover on sale of ethylene oxide is assessable. Section 5(1)(iv) which provides for levy of tax on works contract is as follows: -