EXECUTIVE ENGINEER, BSNL Vs. CTO

JUDGEMENT

(1.) THIS revision petition has been filed by the B.S.N.L. against the order of the Tax Board dated 4th October, 2002 dismissing its appeals against the imposition of sales tax on the sale in the form of supply of materials to the contractor for execution of work contract awarded by the B.S.N.L. to such contractors.

(2.) CHALLENGING the said levy, various contentions were sought to be raised by the assessee in the present revision petition on the anvil of Section 2(38) defining sale under RST Act and also Article 285 and 286 of the Constitution of India. However, this controversy has been put to rest by a recent decision of the Hon'ble Supreme Court in the case of Karya Palak Engineer, C.P. W.D., Bikaner v. Rajasthan Taxation Board , Ajmer and Ors., AIR 2004 SC 4499 in which discussing the entire case laws on the point, the Apex Court held against the assessee that such supply of material to the contractor amounts to a taxable sale and even the Union of India or any of its department like B.S.N.L. in the present case is also liable to pay sales tax on such material supplied by it to the contractor for execution of its works contract. The relevant paras No. 19 and 21 of the aforesaid Supreme Court decision are quoted below for ready reference:

(3.) IN view of the aforesaid binding legal precedent, the appeal of BSNL is liable to be dismissed against the B.S.N.L. and in favour of the respondent -Revenue holding that the sales tax is exigible on the value of material supplied by the assessee B.S.N.L. to the contractor for execution of its works contract.