JUDGMENT

MARKANDEY KATJU, J. —

1.Leave granted.

2.This appeal by special leave has been filed against the impugned judgment & order 22.6.2006 of the Jharkhand High Court in Writ Petitions Nos. 482, 467, 493 and 466 of 2005.

3.Heard learned counsel for parties and perused the record.

4.The respondent, a company registered under the Indian Companies Act, 1913 is engaged inter alia in the execution of works contracts of designing, supplying, installation, fabrication, testing and commissioning of air-conditioning plants. The assessing authority acknowledged that the contracts in question were works contracts and the material supplied in the execution of the works contracts only are liable to be taxed. However, the Sales Tax Authorities had sought to levy a uniform rate of tax @ 16% holding that in the instant case the incidence of tax is commensurate with actual transfer of property that takes place in the execution of works contract.

5.Although the respondent had deposited with the appellant the entire amount of the sales tax charged and demanded @ 16%, it passed on to its customers sales tax restricted to the rate of 8% because in terms of the Circular letter No. 3971 dated 18.5.1984 issu