The main legal point established in the judgment is that the enforcement of tax provisions is contingent on the existence of rules prescribing deductions for arriving at the taxable turnover.

Thomas, J.

In these connected cases, the validity of certain provisions of the Kerala General Sales Tax Act, 1963 (for short'the Act') and the particular Rule framed under the Act has been challenged by different persons who have undertaken contract work in different areas. As per the impugned provisions sales tax has been levied on the sale of goods involved in what is called "works contract", S.2(viii), S.2(xxi) read with Explanation 3(A), S.2(xxvii) read with Explanation 1(A), S.2(xxvi), S.2(xxv) and S.5(1)(iii) of the Act and Rule 8(4) of the Kerala General Sales Tax Rules (for short'the rules') are the provisions principally assailed herein. When these cases came up before a Division Bench on reference, it was felt that the issues involved are of far-reaching importance and of substantial revenue and hence, the Division Bench referred these batch of cases to a Full Bench. It was thus that the cases have reached us.

2., The impugned provisions as such were brought into the Act by means of

y amendments carried out from 1-4-1984 to 1-7-1987. We make it clear mat the challenge is confined to these provisions which remained on the statute book as on 1-7-1987. We state this because some further amendments to the same and other provisions have been brought out subsequently through Acts 23/91 and 8/92 etc. Such amendments have also been challenged in other original petitions, and we are told that a learned single Judge (Mr. Justice T.L. Viswanatha Iyer) has disposed of such original petitions. We make it again clear that this Full Bench is not concerned with such amendments made after 1-7-1987. As on the said date, the impugned provisions remained as follows:

"S.2(viii) "Dealer" means any person who carries on the business of buying, selling, supplying or distributing goods, executing works contract, transfers the right to use any goods or supplying by way of or as part of any service, any goods directly or otherwise, whether for cash or for deferred payment, or for commission, remuneration or other valuable consideration and includes -

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(f) a person who, whether in the course of business or not,

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(2) transfers property in goods (whether as goods or in some other form) involved in the execution of a works contract"

"S.2(xii) "Goods" means all kinds of movable property (other than newspapers, actionable claims, electricity, stocks and shares and securities) and includes livestock, all materials, commodities and articles (including those to be-used in the construction, fitting out, improvement or repair of immovable property or used in the fitting out, improvement or repair of movable property) and every kind of property (whether as goods or in some other form) involved in the execution of a works contract, and all growing crops, grass or things attached to, or forming part of the land which are agreed to be severed before sale or under the contract of sale" ).

S.2(xxi) "Sale" with all its grammatical variations and cognate expressions means every transfer (whether in pursuance of a contract or not) of the property in goods by one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration, but does not include a mortgage, hypothecation, charge or pledge;

Explanation (3A): A transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract shall be deemed to be a sale.

Explanation (4) : The sale, or purchase of goods shall be deemed, for the purposes of this Act, to have taken place in the State wherever the contract of sale or purchase might have been made, if the goods are within the State".

"Section 2(xxvii) "Turnover" means the aggregate amount for which goods are either bought or sold, supplied or distributed by a dealer, either directly or through another, on his own account or on account of others, whether for cash or for deferred payment or other valuable consideration, provided that the proceeds of the sa