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PATNA HIGH COURT
N.Roy and S.B.Sinha JJ.
Beekay Engineering Corporation
Versus
State Of Bihar
Civil Writ Jurisdiction Case No. 605 of 1991 ;
Decided On : DECEMBER 16, 1991
WORKS CONTRACT - PURCHASE OF GOODS - CONCESSIONAL RATES - FORM C - ENTITLEMENT - A works contractor executing works contract within the meaning of the provision of section 2 (ww) of the Bihar Finance Act, 1981 is entitled to get the benefits of purchasing goods at concessional rates as prescribed under section 8 (1) (b) of the Central Sales Tax Act, 1956, on furnishing declaration in form C.
Fact of the Case:
The petitioner, a works contractor, filed an application for issuance of one book of form C to purchase goods at concessional rates in the course of inter-State trade or commerce for use in the execution of works contract. The respondent refused to issue the same on the ground that form C cannot be issued to contractors/builders.
Finding of the Court:
The court held that a works contractor is a "dealer" within the meaning of the provisions of the Bihar Finance Act, 1981 and the Central Sales Tax Act, 1956, and is entitled to the benefits of using form C while making purchase in the course of inter-State trade or commerce.
Issues: Whether a works contractor is entitled to get the benefits of purchasing goods at concessional rates as prescribed under section 8 (1) (b) of the Central Sales Tax Act, 1956, on furnishing declaration in form C.
Ratio Decidendi: The court relied on the provisions of the Bihar Finance Act, 1981 and the Central Sales Tax Act, 1956, and held that a works contractor is a "dealer" within the meaning of the said Acts and is entitled to the benefits of using form C while making purchase in the course of inter-State trade or commerce. The court also relied on the Supreme Court decision in Builders Association of India V/s. Union of India [1989] 73 STC 370 (SC); AIR 1989 SC 1371, which held that a transfer of property in goods under sub-clause (b) of clause (29-A) of article 366 of the Constitution is deemed to be a sale of the goods involved in the execution of works contract by the person making the transfer and a purchase of those goods by the person to whom such transfer is made.
Final Decision: The court allowed the writ petition and quashed the impugned orders refusing to issue form C to the petitioner.
S. B. SINHA AND N. ROY, JJ.
1. Whether a building contractor executing works contract within the meaning of the provision of section 2 (ww) of the Bihar Finance Act, 1981 (hereinafter called and referred to for the sake of brevity of "the said Act") will be entitled to get the benefits of purchasing goods at concessional rates as prescribed under section 8 (1) (b) of the Central Sales Tax Act, 1956 , on furnishing declaration in form C, is the question involved in this application.
2. 2. The petitioner admittedly carried on works contract and is a registered dealer within the meaning of section 14 of the Bihar Finance Act, 1981 (annexure 1) as also under section 7 (2) of the Central Sales Tax Act, 1956 (annexure 2 ).
3. 3. The petitioner has contended that it had been making purchase of goods in the course of inter-State trade or commerce for use thereof in the execution of works contract on the basis of form C furnished to the concerned dealers.
4. 4. The petitioner filed an application on August 16, 1980 for issuance of one book of form C but the respondent No.4, by an order dated August 16, 1984 (annexure 4) refused to issue the same mentioning "in case of contractors/builders form C cannot be issued to be used at present".
5. 5. The learned counsel appearing on behalf of the petitioner has raised a short question in support of this application.
6. 6. The learned counsel submitted that a dealer like the petitioner who carries on the business of works contract being a "dealer" within the meaning of the provisions of section 2 (e) of the Bihar Finance Act, 1981 and being registered both under the said Act as also the Central Sales Tax Act, cannot be denied the benefits of using form C while making purchase in the course of inter-State trade or commerce.
7. The learned counsel, in this connection, has strongly relied upon in Builders Association of India V/s. Union of India [1989] 73 STC 370 (SC); AIR 1989 SC 1371 as also a judgment of a Division Bench of the Andhra Pradesh High Court in Unitech Ltd. V/s. Commercial Tax Officer [1991] 83 STC 207; 1991 APSTJ 176.
8. 7. In terms of section 2 (b) of the said Act (CST Act ?), a "dealer"is a person, who carries on (whether regularly or otherwise) the business of buying, selling, supplying or distributing goods, directly or indirectly, for cash or for deferred payment, or for commission, remuneration or other valuable consideration.
9. Sec.2 (c) (of the CST Act ?) defines "declared goods" to mean goods declared by Parliament to be of special importance in inter-State trade or commerce within the meaning of article 286 of the Constitution of India.
10. Sale has been defined in section 2 (t) of the said Act, to include transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract.
11. 8. Sec.2 (ww) of the said Act defines "works contract" to mean any agreement for carrying our for cash or deferred payment or other valuable consideration the construction, fitting out, improvement or repair of any building road, bridge or other immovable or movable property.
12. 9. From a conjoint reading of the aforementioned provisions, there cannot be any doubt that a person who carries on the business of "works contract" may transfer property in goods whether as goods or in some other form and as he sells "goods" involved in the works contract and thus becomes a "dealer" within the meaning of the provisions of the said Act.
13. 10. As indicated hereinbefore, the petitioner is a registered dealer both under the provisions of the said Act as also under the Central Sales Tax Act.
14. 11. Sec.8 (3) (b) of the Central Sales Tax Act reads as follows :
15. " (3) The goods referred to in clause (b) of sub-section (1) -
16. (a ). . . . . . . . . . . . . . . . . . .
17. (b) are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him or subject to a
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