ASHOK KUMAR GHOSH Vs. UNION OF INDIA

JUDGEMENT

(1.) In this writ application the petitioner inter alia has prayed for a declaration that the Constitution (Forty-sixth Amendment) Act as also the provisions of Bihar Finance Act, 1981, in so far as it seeks to impose sales tax on works contract are ultra vires the Constitution of India and further for a declaration that Section 21(1)(a)(i) as inserted by the Bihar Finance Act, 1985, and Rule 13-A of the Bihar Sales Tax Rules, 1983, are also ultra vires, illegal, void ab initio and further for quashing of the orders imposing penalty upon the petitioner for the assessment years 1985-86 and 1987-88 as also the demand notices for the years 1986-87 and 1987-88 and the notices of assessment for the years 1986-87 and 1987-88 as contained in annexure-4 series to the writ application.

(2.) The facts of the case lie in a very narrow compass.

(3.) Allegedly the petitioner had entered into various contracts with the respondent No. 5 and pursuant thereto had been carrying on various construction jobs of civil nature. According to the petitioner, the material contents involved in the works contract is about 25 per cent and 30 per cent of the entire works contract. The petitioner has further asserted that most of the materials specially steel and cement are supplied by the principal either free of cost or on cost recovery basis and the title of the said property at all times remains with the principal and never passes on to the petitioner. It is further alleged that the said contract jobs are performed by the hired labourers. It has further been asserted that sales tax payable by him on the whole contract is 8 per cent plus 1 per cent turnover plus 5 per cent surcharge on sales tax payable which is about 9.5 per cent in terms of the notification issued by the State of Bihar under the Bihar Finance Act, 1981 and rules framed thereunder. The petitioner has further asserted that his principal had been deducting 4 per cent from the amount payable to the petitioner from his running account bills in terms of Section 25A of the Bihar Finance Act.