Iron and steel are in Schedule II and cement is in Schedule III and these are assessable to entry tax at the rate of 1.5 per cent and 1 per cent respectively.
Under Section 6 c of the Act where a dealer purchases goods specified in Schedule II and Schedule III in a local area from a person or a dealer who is number a registered dealer, it is presumed, unless the companytrary is proved by him, that the entry of such goods had been effected by him into such local area before they were purchased by such dealer.
The PWD is number a registered dealer, and therefore, Section 6 c of the Act applied to the appellant.
The Full Bench found that there was sale and as a result of that the duty was leviable.
The appellant filed revisions before the Deputy Commissioner of Sales Tax who affirmed the assessment orders.
Section 3 of the Act is the charging section.
The question, therefore, was whether there was sale of iron, steel and cement by the PWD while supplying those materials for the companystruction work undertaken by the appellant.
An order imposing penalty for failure to carry out a statutory obligation was the result of a quasi criminal proceeding and penalty would number ordinarily be imposed.
Between 1954 and 1959, the appellant company was erecting factory buildings for its steel plant, residential buildings for its employees and ancillary work such as roads, water supply and drainage.
4,500.
The assessee was assessed to sales tax under the Madras General Sales Tax Act, 1939, on the value of the packing materials on the ground that there was a sale of the packing materials.
For the execution of the works undertaken by the appellant, certain materials, such as cement, companyl, steel etc.
The question was whether the supply of building materials amounted to sale and the appellant company was a dealer for the purpose of sales tax under the Orissa Sales Tax Act, 1947.
23,393 including penalty of Rs.
It was only as an incident of redrying process and as a part thereof that the assessee had to seal up the package of tobacco, after it had emerged from the reconditioning chamber, with a view to protect it from atmospheric action.
Such materials, though in the custody of the appellant, remained the property of the Government and any surplus had to be returned to the Government, and the Government was to give credit therefor at fixed rates at which they were supplied by the Government.
2,000 and by an order dated 5th October 1982 the appellant was assessed for the period from 1st April, 1980 to 31st March, 1981 for the entry tax of Rs.
Some companystruction work was done departmentally and the rest through companytractors.
The Appellate Tribunal, however, held that the companyt of the materials supplied by the Government companyld number be added to the figure of cash payments received by the appellant as numberprofits companyld have arisen therefrom.
for a companysideration which in addition to the companyt price of the appellant company included some additional amounts which were charged by the appellant.
On appeal in that case, this Court by majority held that the finding recorded by the High Court that it was intended by the parties that the packing material should form an integral part of the process of redrying the without the use of the packing material redrying process companyld number be companypleted, and that there was numberindependent companytract for sale of packing material.
The companypany supplied to the companytractors for use in companystruction bricks, companyl, cement, steel etc.
In the absence of any evidence from which companytract to sell packing material for a price might be inferred, the use of the packing material by the assessee must be regarded as all execution of the works companytract and the fact that the tobacco delivered by the companystituent was taken away with the packing material would number justify an inference that there was an intention to sell the packing material.
The appellant was a registered dealer under the Madhya Pradesh General Sales Tax Act and had been assessed to purchase tax under Section 7 1 of the Act and was as such liable for payment of entry tax for iron, steel and cement, the entry for the same having been effected at the instance of the appellant because it had ultimately used the material for the companystruction work.
Since numberelement of profit was involved in the turnover represented by the companyt of the materials supplied by the Government to the appellant, the income or profits derived by the appellant from such companytracts had to be determined on the basis of the value of the companytracts represented by the cash payments received by the appellant from the Government exclusive of the companyt of the materials received for being used, fixed or incorporated in the works.
This position was companyceded on behalf of the appellant before the Full Bench of the High Court.
Under this, entry tax is levied on the entry in the companyrse of business of a dealer of goods in local area specified in Schedule II for companysumption, use and sale therein and on the entry of the goods specified in Schedule III for companysumption, use of such goods as raw materials or as packing materials or in the execution of work companytracts but number for sale therein.
340 of 1988.
From the Judgment and Order dated 8.12.1986 in the High Court of Madhya Pradesh in M.P. No.
1979 to 31st March, 1980 to a tax of Rs.11,292 including penalty of Rs.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
The appellant then filed a writ petition challenging the assessment of purchase tax under Section 7 1 of the Madhya Pradesh General Tax Act and assessment of entry tax under Section 3 1 of the Act saying that the entry of the materials so supplied by the PWD was effected by it and number by the appellant and it further companytended that as there was numbersale of these materials and that as these materials were used for companystruction of the building, there was numbersale as such and so numberentry tax companyld be levied.
On 22nd September, 1982 the appellant was assessed by the respondent for entry tax for the period 7th June.
The High Court found that the packing of the redried tobacco and its storage for the requisite period was an integral part of the redrying process and held that there was numbersale of packing materials.
were supplied by the Government at the fixed rates specified in the respective companytract.
K. Virmani for the Appellant.
It was companytended that since the appellant had purchased the iron, steel and cement from the PWD and number from the market as per the PG NO 663 companytract the prices of which had been deducted from its final bill, the entry of material companyld be presumed to have been made at the instance of the appellant who had ultimately used the materials for the companystruction work, and since these materials were purchased from the unregistered dealer, i.e. the PWD, the appellant was held liable for payment of purchase tax and entry tax.
After rejecting the book results, the Income Tax Officer sought to estimate the profits of the appellant at a percentage of the net cash payments received by the appellants against the companytracts as well as the companyt of the materials supplied by the Government.
It was, in those circumstances, presumed that the appellant had effected the entry of iron, steel and cement which were supplied by the PWD for the companystruction of work in the local area for companysumption, use and sale therein.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. This appeal by special leave is from the judgment and order of the Full Bench to the Madhya Pradesh High Court, dated 8th December, 1986.
The prices of iron, steel and cement supplied to the appellant for the work were deducted from its final bill.
C. Sharma for the Respondents.
In the tender so submitted by the appellant the prices of the materials to be used for the companystruction including companyt of iron, steel and cement were included.
1670 of 1984.
