COMMISSIONER OF SALES TAX Vs. MOHAMMAD ZAHOOR

JUDGEMENT

(1.) THIS is a reference under Section 44 of the Madhya Pradesh General Sales Tax Act. The reference has been made on the application dated 7th July, 1970, moved by the Commissioner of Sales Tax, against the order passed by the Tribunal, the Board of Revenue, M. P. , on 30th April, 1970, in Appeal No. 109-IV of 1969. By the aforesaid order, the Board of Revenue has decided the other two appeals, Commissioner of Sales Tax, M. P. v. Mohammad Zahoor, P. W. D. Contractor, Sidhi (No. 107-IV of 69) and Commissioner of Sales Tax, M. P. v. Mohammad Zahoor, P. W. D. Contractor, Sidhi (No. 108-IV of 69) also in-between the same parties, but for different periods of assessment. Since the point involved in all the appeals was common, they have been disposed of by the common order. Under these circumstances, the judgment in this case will also govern the following miscellaneous civil cases : (i) Misc. Civil Case No. 34 of 1972 ; and (ii) Misc. Civil Case No. 33 of 1972 : Commissioner of Sales Tax v. Mohammad Zahoor.

(2.) THE Tribunal has referred the following question to be answered by this court: Whether, under the facts and circumstances of the case, the iron and cement supplied by the P. W. D. to the assessee for use in the works executed by the appellant for P. W. D. was sale and was liable to purchase tax under Section 7 (1) of the Act ? The facts relevant for the purposes of this reference have been stated in the statement of the case which was prepared with due notice to the counsel for both sides and they had no comments on the same. The periods of assessment involved in these three cases relate to the years 1961-62, 1963-64 and 1965-66.

(3.) IT is undisputed that the assessee is a dealer registered under the provisions of the Madhya Pradesh General Sales Tax Act. The assessee executed certain works for the State Government in the public works department. Certain quantity of iron and cement was supplied by the public works department to the assessee for being used in the construction of buildings concerned. Since, according to the terms and conditions of the tender, the price of these articles was already included in the tender offered by the contractor and accepted by the State Government, necessary deductions were made from the final bill towards the price of iron and cement supplied by the department to the assessee : vide assessment order dated 27th February, 1967, for the periods 1961-62 and 1963-64, and the order dated 8th March, 1967, for the period 1965-66. The assessing authority held the assessee liable for purchase tax over the price of iron and cement supplied by the public works department. The assessing authority was of the view that since iron and cement were supplied by the P. W. D. and their price was finally deducted from the payments due to the contractor, the transaction amounted to a sale and since the assessee had accordingly purchased the aforesaid articles for being used in the works and for which he had charged the State Government, he was liable to purchase tax in accordance with the provisions of Section 7 of the Madhya Pradesh General Sales Tax Act. For the sake of convenience, Section 7 of the Act is reproduced below :