STATE OF KERALA Vs. THRIMATHY CONTRACTING COMPANY

JUDGEMENT

(1.) The question raised in the Sales Tax Revision filed by the State is whether the Tribunal was justified in holding that the work executed by the respondent, viz., supplying and applying hot white thermoplastic road marking paint, marking of pedestrian crossing, zebra crossing etc. with white and yellow paints on road constitute civil works within the meaning of Section 7(7) of the Kerala General Sales Tax Act, 1963 (for short 'the K.G.S.T. Act), entitling the respondent for payment of tax at compounded rate at 2%. We have heard learned Government Pleader appearing for the petitioner and Sri. Ramadas, appearing for the respondent.

(2.) The work involved is awarded to the respondent by the Kerala Public Works Department for marking of National Highway with hot white and yellow thermoplastic road marking paint. Under the work schedule, payment is for every square feet of painting work done on road in terms of the instructions of the PWD. Admittedly, paint marking on road is through the middle and at pedestrian crossings with zebra marking and also arrow indications on the road. While the case of the State is that the road marking through thermoplastic paint is a painting work done after construction of the road and an independent contract, awarded to and executed by the respondent, the case of the respondent is that the road work was done by the Managing Partner of the respondent-firm and even though the work is separately awarded, it constitutes an integral part of the road construction work. The Tribunal accepted the contention of the respondent that marking with paint is a requirement for the National Highway and so much so, the construction of the road is said to be complete only when markings are done on the road and accordingly, declared the respondent's entitlement for payment of tax at compounded rate, at 2%. Since the question pertains to respondent's entitlement for compounding under Section 7(7) of the K.G.S.T. Act, we extract hereunder the said Section with Explanation thereto.

(3.) The next question to be considered in this case is whether the work executed by the respondent is part of the construction of the road, which alone will entitle the respondent for confessional rate of tax under the scheme of compounding provided under Section 7(7) of the K.G.S.T. Act, because the work done is not in the nature of repair or maintenance of the road. Government Pleader submits that construction of the road is complete in all respects prior to the road marking work done by the respondent with the application of special type of paints under a separate contract. Counsel for the respondent, on the other hand, contended that without marking with paint, the construction in the National Highway will not be complete and only after making the markings on the Highway, it is open for traffic. Even though we agree with the contention of Counsel for the respondent that paint marking on the Highway is a requirement for opening the Highway for traffic under the instruction issued by the Ministry of Surface Transport, we are of the view that such marking does not constitute part of the construction of the road. In the first place, marking is done after completion of the construction of the road and it is awarded under separate contract. In fact, existing roads are also marked with paints and it is invariably done when the road is declared as National Highway or State Highway. Therefore, paint marking is essentially a regulation introduced for smooth and safe vehicular traffic and it is not a part of road as a structure. In fact, ever so many roads are constructed and maintained in the State without any paint marking, whatsoever. It cannot be said that such roads are maintained without completion of the construction. In our view, marking of the road is not part of the construction of the road and it is a post construction work done for safe vehicular movement and the purpose is to guide the drivers and pedestrians using the road.