The main legal point established in the judgment is the interpretation of the provisions of Section 7(7) and Section 7(7A) of the KGST Act in relation to the classification of the supply of track ballast for the Railways as a civil work or 'other contract'.

Ramachandran Nair, J.

The question raised in the S.T. Revision case filed by the petitioner is whether the supply of track ballast for the Railways in terms of the order issued by the Railways is a civil work for the petitioner to opt for payment of tax at compounded rate under Section 7 (7) of the KGST Act. It is seen from the records that the Assessing Officer accepted petitioner's claim that the Railways' order is a works contract. However, according to the officer it is not a civil contract falling under Section 7(7) of the KGST Act. He has in fact permitted payment of tax at compounded rate under Section 7(7A) which provides for other contracts. In appeal filed by the petitioner, the first appellate authority as well as the Tribunal confirmed the assessment and hence this revision. We have heard counsel appearing for the petitioner and Government Pleader appearing for the respondents.

2. During preliminary hearing, we wanted to know the exact nature of work done by the petitioner for the Railways and in this regard we called for copy of the purchase order/work order issued by the Railways, which is produced by the counsel before us today. Even though the name of work in the heading is written as "Collection and training out of track ballast in Wadakancheri Depot", we find that the order is essentially one for supply, stacking and delivery of stone ballast on either side of the Railway track in terms of the instruction issued by the Engineer. The order in the Form given by the Railway is as follows:

Table

From the above it is clear that rate fixed for stone ballast supplied by the petitioner is based on the quantity supplied in cubic metres, the agreed rate of which is mentioned in the supply order. Under item 1 of the supply order, petitioner is required to bring and stock the stone ballast of the required size at the Wadakkancherry Station in the Railway track. Measurement will be taken for the purpose of making payment at the rate at which the order is issued. The next item of work given to the petitioner is loading the stone ballast stacked at the Railway Station in the Railway wagons and hoppers by using contractor's equipments, men and labour, transport it through the Railway line and unload it in the permanent way sections between Thrissur and Chalakkudy. It is to be noted that training out which is laying the stone ballast in a pattern, is not required to be done by the petitioner, even though the heading of the work order mentioned so. On the other hand petitioner has to only train the ballast into the track side in terms of the instruction given by the Site Engineer. Obviously the purpose is to replenish the deficiency in stone ballast on Railway track as part of maintenance work. However, the little technical work of laying the unloaded ballast in the required pattern to call it training out is the work probably done by the Railways and it is not part of the work assigned to the petitioner. Therefore, the petitioner's claim that work involves training out of the supplied stone ballast and so much so, it is maintenance of Railway track which is a civil work falling under Section 7(7) is unacceptable. We are of the view that the order is just a purchase order and the stacking is provided at a particular station to verify the actual quantity supplied by the petitioner and the balance work also forming part of the supply order requires the petitioner to carry the goods in the wagons or hoppers supplied by the Railway and deliver it on either side of the Railway track specified in the supply order in terms of the instruction of the Site Engineer. Therefore, this is sale of goods with instruction to deliver the commodity at a particular spot. The sale price includes not i.e. labour, whether mechanized or otherwise, used for delivering it on the sides of the Railway track. Explanation 2(i) to Section 2(xxvii) providing for turnover takes in any sums charges for anything done by the dealer in respect of the g