The word "directly" in Section 13(1)(b)(ii) of the Bihar Finance Act, 1981, emphasizes the fact that the use of the goods in question is a must for the execution of the works contract.

K.Venkataswami, J.

1. On an earlier occasion when this matter was heard by a Division Bench of this Court the learned Judges were of the view that the issue raised in this matter requires a decision by a larger Bench and on that view of the matter they passed an order of reference on 25.8.1987

2. The order of reference can be usefully set out as it contains the relevant facts in a nut-shell as well as the reason for referring the matter to a larger Bench. The order of reference reads as follows.

8. 25.8.1987 The petitioner is a Public Limited Company. It has entered into a Works agreement with Tata Iron and Steel Company Limited, Jamshedpur for execution of certain works. The nature of the work is putting up structural constructions. In the course of execution of the Works Contract, the petitioner had to use cranes, tippers and trucks. The petitioner had been granted a certificate in terms of Sec. 13(1)(b)(ii) of the Bihar Finance Act, 1981. Subsequently, it filed a petition for amendment of the said certificate by adding cranes, tippers and trucks in the Certificate. The Sales Tax authorities refused the prayer for inclusion of those items in the certificate. It was refused on the footing that these items were not "directly" for mo in the execution of the works agreement, hence die present application before us under Articles 226 and 227 of the Constitution of India. One of She decisions relied upon by file petitioner in support of its case is Tata Iron and Steel Co. Limited V/s. The State of Bihar and Ors. 26, S.T.C. 30). That case related to insertion of certain items in the registration certificate, The items were Lamps, Spare parts of plant and machinery, Spare parts for Eimco Loader, spare parts for Commute Engines, Spare parts for crane, Spare parts for chipping hammers, screen vibrating and wire screen cloth, oil seal, wagon components and packing cotton yarn and flax. The prayer for insertion of these items in the registration certificate had been rejected by the sales tax authorities in that case. A Bench. of this Court relying upon a decision of the Supreme Court in the case of J.K. Cotton Spinning and Weaving Mills Co. Ltd V/s. The Sales Tax Officer, Kanpur and Anr. 16 STC 563 held that in order to fall within the expression "electrical equipment" it was not necessary in terms of Rule 13 that those items must be m ingredient of the finished goods to be prepared, or that it must be a commodity which-is used in the creation of goods." On that basis their Lordships rejected the stand of the then learned Standing Counsel No.1, who had submitted that the word "directly" must be given its full connotation and it was not redundant. Following the Supreme Court decision, their Lordships held screen vibrating and wire screen cloth, Seal Oil, Wagon components and packing cotton yarn and flax as items used in the manufacture of goods. Their Lordships, therefore, directed inclusion of those items in the registration" certificate. In the instant case, we are concerned with the execution of works contract. At the time, the" case of Tata Iron and Steel Company Limited (Supra) was decided, the Sales Tax law did not contemplate imposition of sales tax on execution of works contract. Sec. 13 of the Bihar Finance Act, 1981 (Bihar Act 5 of 1981) provides that notwithstanding any thing contained in Part I, but subject to such conditions and restrictions as may be prescribed, sales to or purchases by registered dealer of goods required by him "directly" for use in the manufacturing or processing of goods for sale shall not be subject to tax." Patna case referred to earlier did not deal with execution of works contract.

In this connection we are faced with a decision of the Orissa High Court in Kalinga Construction Co. Limited V/s. Collector of Sales Tax, Orissa, Cuttack(13 S.T.C., 225), where their Lordships held as follows :-

For the purpose of his business a contractor may have to maintain a number of trucks or machineries whic