The provisions of section 5(3), section 23, rule 29(2) and rule 46(2) of the Rajasthan Sales Tax Act, 1954 and the Rajasthan Sales Tax Rules, 1955 are valid and constitutional. The Constitution (Forty-sixth Amendment) Act, 1982 is also constitutional.

M. B. SHARMA, J. - In the above numbered writ petitions there is challenge to rule 46(2) of the Rajasthan Sales Tax Rules, 1955 (for short, "the Rules'). In some there is additional challenge to rule 29(2) of the Rules, whereas in few others there is also challenge to section 5(3), section 23 of the Rajasthan Sales Tax Act, 1954 (for short, "the Act) and the Notifications dated May 28, 1987, March 8, 1988 and June 28, 1989. Therefore, all the above numbered writ petitions are being disposed of by a common order. During the course of arguments none of the learned counsel for the petitioners in any of the writ petitions raised any challenge to section 23(2) and the above referred to three notifications and therefore we will confine to the remaining challenge as aforesaid. In the case of State of Madras v. Gannon Dunkerley & Co. (Madras) Ltd. [1958] 9 STC 353 (SC); AIR 1958 SC 560, the Supreme Court held that the expression "sale of goods" as used in entry 54 of List II (State List) of the Seventh Schedule to the Constitution of India or entry 48 of List II of the Seventh Schedule to the Government of India Act, 1935, has the same meaning as in the Sale of Goods Act, 1930. It was further held that an indivisible works contract cannot be broken up into its component parts. The aforesaid decision was followed by the Supreme Court in its later decisions and the Supreme Court held that various other transactions which resemble in substance transactions by way of sales to be not liable to sales tax. As a result of these decisions, a transaction in order to be subject to the levy of sales tax under entry 92-A of List I or entry 54 of the State List, should have the ingredients, namely parties are competent to contract, mutual assent and transfer of property in goods from one of the parties to the contract to the other party thereto for a price. As a result of the aforesaid decisions there became scope for evasion of tax in various ways and therefore the Constitution (Forty-sixth Amendment) Act, 1982, was made by the Parliament and it received the assent of the President on February 2, 1983. By the aforesaid amendment a new clause (29-A) was inserted in article 366 of the Constitution of India and under sub-clause (h) within the expression "tax on the sale or purchase of goods" a tax on the transfer of property in goods involved in the execution of a works contract is included. As a result of the Forty-sixth Constitution Amendment some of the States enacted separate Acts for imposing tax on works contracts and others made necessary amendment in the sales tax laws already in force. Vide Rajasthan Act No. 9 of 1988, section 4(b), with effect from April 1, 1984, sub-section (3) was inserted in section 5 of the Act. Sub-section (3) of section 5 of the Act reads as under :

"(3) Notwithstanding anything contained in this Act, in the case of a works contract, the turnover of such contract shall he subjected to tax :

Provided that such deductions, as may he prescribed, may be allowed to a contractor while determining his tax liability."

Definition of "works contract" as per section 2(u) of the Act includes any agreement for the building, construction, manufacture, processing, fabrication, erection, installation, fitting out, overhauling, repair, improvement, modification, whitewashing, painting, varnishing and other similar activities or commissioning of any movable or immovable property for cash, deferred payment or other valuable consideration but excludes a works contract purely of labour or service.

Rules 29(2) and 46(2) of the Rules, the validity of which is under challenge, read as under :

"(2). In case of a works contract, tax shall be computed on the turnover of the contractor after deducting -

(i) The value of the goods transferred in execution of works contract, whether as goods or in some other form which have already suffered tax at the rate prescribed under section 5 or which are exempted from tax under section 4 of the Ac