STATE OF JHARKHAND Vs. TATA STEEL LTD

JUDGEMENT

(1.) The instant writ petition has been preferred by the petitioner-State of Jharkhand challenging part of the order dtd. 6/12/2008 passed in Revision Petition bearing JR 266 of 2001 by Commercial Taxes Tribunal, Jharkhand, Ranchi, to the extent Tribunal has set aside additional levy of tax on supply of cement to the contractor by the Assessee.

(2.) The dispute in the instant writ petition pertains to the period 1989-90, wherein, under the provisions of Sec. 17(2)(b) of the Bihar Finance Act, 1981, regular assessment order dtd. 17/3/1993 was passed by the Assessing Authority in respect of the Assessee-Tata Steel Ltd. The Assessee during the relevant period, purchased cement after paying tax and supplied it to its contractor to execute works on its behalf worth Rs.1,03,62,379.00 and, at the time of assessment, the Assessee claimed that since the tax on purchase of cement has already been paid at the first point and supply of cement was made to the contractor for use in the work of Assessee itself, therefore, no tax could have been levied on supply of cement by it to its contractor. However, the Assessing Officer rejected the claim of the Assessee on the ground that although cement was purchased by the Assessee after paying tax, at the time of supply of cement to the contractor, the Assessee deducted from the bills of the contractor the price of cement and, thus, said transaction amounted to second sale leviable to tax under the Bihar Finance Act, 1981. Accordingly, on supply of cement of Rs.1,03,62,379.00, tax @ 11% amounting to Rs.11,39,861.69 was levied in the Assessment Order dtd. 17/3/1993 (Annexure-1).

(3.) Mr. Sachin Kumar, AAG-II, appearing for the State of Jharkhand, has vehemently assailed the portion of the Judgment of the Tribunal and has contended, inter alia, that supply of cement by the Assessee-Tata Steel Ltd. to its contractor for carrying out its own work would be deemed to be a sale, as, Tata Steel Ltd. has, admittedly, deducted the value of cement from the contractor's bill. By placing reliance upon the decisions of the Hon'ble Apex Court in the case of M/s. N.M. Goel and Co. Vs. Sales Tax Officer, Rajnandgao and Anr., reported in (1989) SCC 335, and Rashtriya Ispat Nigam Ltd. Vs. State of Andhra Pradesh, reported in (1998) 8 SCC 439, it has been contended that aforesaid issue is no longer res integra and once the Assessee has recovered the amount towards supply of cement from the bills of the contractor, the same was leviable to tax at the hands of the Assessee being second sale at the point of time.