The taxable turnover and the applicability of deductions under the Uttarakhand Value Added Tax Act, 2005 were central to the Court's decision.

JUDGMENT :

Sri S.K. Mishra, J.

1. In this Commercial Tax Revision, the revisionist prays to set-aside the orders passed by the Commercial Tax Tribunal, whereby it has held that taxable turnover of the revisionist - assessee (hereinafter referred to as “the Assessee” for brevity) is Rs. 1,11,930/- on the ground that it is in violation and ignoring the provisions of Sub-Section 3, 7 and 9 of Section 3 of the Uttarakhand Value Added Tax Act, 2005 (hereinafter referred to as “the Act” for brevity). The Assessee is a civil contractor. For a period between 01.10.2005 and 31.03.2006, he received a sum of Rs. 6,21,570/- from the contractee department out of which Rs. 4,61,670/- was against the earth work carried out by the Assessee-revisionist. The case of the revisionist is that since the amount received by him for execution of work contract, which involved sale goods only for Rs. 1,59,900/-, he is entitled to deduction of 30% as labour charges as per the provisions under Rule 14(2)(e) of the Act. He submitted his return before the Assessing Authority for the period of 01.10.2005 to 31.03.2006 and the Assessing Authority passed the assessment order under Section 25(6) of the Act and rejected several contentions of the Assessee-revisionist and determined the returnable taxable turnover at Rs. 3,33,630/- and imposed tax thereupon.

2. The Assessee - revisionist filed an appeal before the First Appellate Authority, who vide order dated 07.07.2010 accepted the contentions of the Assessee – revisionist that Assessee – revisionist received a sum of Rs. 4,61,670/- for the hill side cutting and earth work, and therefore, deleted the said addition made by the Assessing Authority towards the payment received by the Assessee – revisionist for hill side cutting and earth work. The First Appellate Authority further gave a deduction @ 30% as provided under Rule 14(2)(e) of the Act, and determined the taxable turnover of the Assessee – revisionist as Rs. 1,11,930/-.

3. The Assessee – revisionist aggrieved, as his contention was not accepted by the First Appellate Authority that the taxable turnover determined by the First Appellate Authority is below the taxable quantum, therefore, there is no liability to pay the tax by the Assessee – revisionist.

4. Since, the matter involved question of law, he preferred a Second Appeal before the Commercial Tax Tribunal on the sole ground that the First Appellate Authority calculated the taxable quantum of revisionist at Rs. 1,11,930/- which is below the taxable limit as provided under Section 3(7) of the Act, but the Second Appeal was dismissed by the Commercial Tax Tribunal vide Annexure 4 to the writ petition.

5. At this stage, there is no dispute that the petitioner was awarded a work contract of Rs. 6,21,570/- out of which a sum of Rs. 4,61,670/- was for hill side cutting and earth work and as Assessee - revisionist did not involve in the sale of goods or services, it was not considered. The question that remains to be decided in this case is whether the Assessee-revisionist’s income of Rs. 1,11,930/- is liable to be taxed, in view of 30% remission for labour charges.

6. Mr. S. K. Posti, learned Senior Counsel appearing for the Assessee - revisionist relying upon the judgment of Jharkhand High Court in the case of “Triveni Engicons Pvt. Ltd. vs. State of Jharkhand 2014 SCC Online Jhar 1050 : (2014) 4 AIR Jhar R 1” would argue that Assessee - revisionist is liable for tax of transfer of property in goods under Sub-Clause (b) of Clause 29(A) is deemed to be a sale of goods involved in the execution of works contract by the person making transfer and a purchase of those goods by the person to whom such transfer is made. The object of the new definition introduced in Clause 29-A of Article 366 of the Constitution, is therefore, to enlarge the scope of “tax on sale or purchase of goods”, wherever it occurs in the Constitution, so that it may include within its scope the transfer, delivery or supply of goods that may ta