PIONEER ENTERPRISE Vs. STATE OF TRIPURA

JUDGEMENT

(1.) THE main question that falls for determination in these writ petitions is whether the contracts between the petitioner and the Public Works Department were pure works contracts or composite contracts consisting of two contracts, one for sale of bricks and the other for work and labour.

(2.) THE facts and questions of law involved in these writ petitions being identical, they were taken up together for hearing and are being disposed of by this common judgment. The petitioner is a manufacturer of bricks. During the period July 1, 1976 to March 31, 1980, the petitioner entered into some contracts with the Public Works Department, Government of Tripura (hereinafter "pwd"), for execution of certain items of work in connection with the construction or improvement of roads. The items of works comprised of, inter alia, collection and stacking of overburnt bricks and "jhama" aggregate. The rate payable, in case of bricks was per thousand number of bricks. In the case of "jhama", it was per cubic metre. The petitioner submitted its returns of turnover showing the supply of bricks made to PWD in pursuance of the said contracts as "sales" and paid the tax due thereon under the Tripura Sales Tax Act, 1976 (hereinafter referred to as "the Act" ). In regard to sales of "jhama", it was claimed that the same was not taxable and as such, no tax was paid in respect thereof. Assessments were made by the Superintendent of Taxes. In the said assessments, the Superintendent of Taxes did not accept the contention of the petitioner that "jhama" was not taxable and included the turnover of the same in the taxable turnover of the petitioner. He also did not allow deduction from the price of bricks charges incurred for carrying, loading, unloading, etc. , as claimed by the petitioner. Aggrieved, the petitioner preferred appeals before the Assistant Commissioner of Taxes. Two contentions were raised. Firstly, it was contended that the part of the turnover that can be attributed to carriage, loading, unloading charges, etc. , could not be termed as sale price of the bricks and, as such, should be deducted from the price for determination of the taxable turnover of bricks. This contention was rejected by the learned Assistant Commissioner of Taxes. It was held that, on the facts of the case, no such deduction could be allowed. The second objection of the petitioner was regarding the levy of tax on supply of brick-bats and "jhama". This was allowed and it was held that sales of "jhama" were not taxable till September 12, 1978. Accordingly, the cases were remanded to the Superintendent of Taxes for fresh assessment. Against the appellate order, further appeals were filed before the Tripura Sales Tax Tribunal which were numbered as case Nos. 31, 32, 33, 34/rev/com/tstt/1982. All these appeals were heard together by the Tribunal and disposed of by a common order dated July 25, 1983. Before the Tribunal, in addition to the claim for deduction of carriage, loading, unloading and stacking charges from the price of the bricks, a new point was raised that the contracts in question were works contracts and, as such, supplies of bricks made in execution thereof did not amount to sales and were not liable to tax.

(3.) THE first point for determination, therefore, is whether the supply of bricks in the instant case in pursuance of the contracts in question was sale. There is no dispute in so far as the facts are concerned. It may be expedient to state briefly the same before proceeding to discuss the law on the subject. The contracts in the instant case, are for construction/improvement of certain portions of different roads. The works comprise of six items. The six items have been separately mentioned in the tender notice and the contract agreements. Against each item of work the quantity, rate, unit and amounts have been stated. Persons interested in execution of the works might submit tender in respect of one or more or all the items of the works. The department concerned had also the option to split up the work between two or more contractors or to accept it in part and not in entirety. Though the name of the contract is construction/improvement of roads specified therein, the six items of work for which tenders were called are completely independent items, some of which are purely job-works whereas the others appear to be for supply of materials. Since the various agreements are substantially similar, we may refer to agreement No. 16/se/1978-79. The six items of work specified therein, so far as relevant, are reproduced below :