A works contract subject to sales tax under the Bihar Finance Act, 1981 must involve the transfer of property in goods. If the goods used in the process of the contract are consumed and do not exist in any form in which property can be transferred, there is no works contract and no sales tax is leviable.

B. P. SINGH, J.

1. The instant writ application was filed by the petitioner-company praying for a declaration that the Constitution (Forty-sixth Amendment) Act, 1982 is ultra vires the Constitution of India as also the Bihar Finance Act, 1981 in so far as it seeks to impose sales tax on the works contracts. It was further prayed that this Court may declare that the provisions with regard to imposition of sales tax on the works contract were not applicable to the nature of the services rendered by the petitioner-company, namely, pest control, household disinfection, anti-termite treatment, etc. It accordingly sought quashing of the order dated 9th December, 1988 (annexure 5) by which respondent No.4, the Deputy Commissioner, Commercial Taxes, Urban Circle, Jamshedpur, held that the provisions of works contract were applicable to the petitioner-company as well in regard to the services rendered by it nnder agreement with the Tata Iron & Steel Co. Ltd. Consequently, it sought quashing of the notices dated 22nd December, 1988 and 23rd January, 1989 (annexures 6 and 7) requiring the petitioner to produce its books of accounts for the purpose of hearing under sections 13 (5) (ii), 17, 18 (i) and 22 (3) of the Bihar Finance Act, 1981 .

2. 2. At the hearing of this writ application, Dr. Debi Pal, appearing for the petitioner, did not challenge the vires of the Constitution (Forty-sixth Amendment) Act, 1982 and the Bihar Finance Act, 1981 in so far as it seeks to impose sales tax on works contract. He, however, submitted that having regard to the nature of services rendered by the petitioner-company, there being no sale of goods, the provisions relating to works contract did not apply and the petitioner-company was not liable to pay any sales tax having regard to the nature of services rendered.

3. 3. According to the petitioner, it is a company engaged in the business of rendering services such as anti-termite treatment, rodent control, general pest control, household disinfection, etc. For this purpose, the petitioner-company has been engaged by M/s. Tata Iron & Steel Co. Ltd. for treating the existing building including wooden and other furniture with pest control and anti-termite treatment. The activity of the petitioner-company is only in the nature of service and no sale of goods is involved in any form whatsoever. According to it, the entire transaction is for rendering services only and, in fact, no goods are transferred in any form whatsoever. The treatment or service rendered by the petitioner is mainly curative or prophylactic/preventive in nature and there is no supply of goods to the client. The chemicals used by the petitioner are in the form of treatment against pests and are consumed in the process of rendering services. The chemicals used are not identifiable in any way as goods and hence there is no transfer of property in goods by the petitioner in the course of pest control services for their clients. The application of chemicals to protect property against attack by pests does not in any way add to the value of the property nor does it add any ornamental or additional quality to the buildings, godowns or any place which is treated with chemicals. In other words, it is a pure contract for rendering services and no question of transfer of property in goods in any form is involved. Since the petitioner is not selling or supplying any material, commodities or articles, its job is purely to render a service in the form of treatment against pests which cannot even be classified as a works contract.

4. 4. The grievance of the petitioner is that despite these facts, it received a notice under section 33 (a) of the Bihar Finance Act from the office of respondent No.4 asking it to appear and to explain why it had not filed returns under the provisions of the Act relating to works contract. The petitioners representative appeared before respondent No.4 and explained that the petitioner was engaged in the business of r