- (1.)The petitioner is a dealer registered under the Kerala General Sales Tax Act, 1963 ("the Act"), and an assessee on the files of the first respondent. Petitioner undertakes, inter alia, execution of contract works like construction of buildings and others. For the purpose of executing these contracts, the petitioner had, in the years 1970-71 to 1978-79 and 1981-82, purchased certain materials from unregistered dealers. These purchases were brought to tax under S.5A(11)(a) of the Act as if the materials concerned had been consumed in the manufacture of other goods for sale or otherwise. Copies of the orders of assessment for these years are exhibits PI to P10, and all of them show ex facie that the purchases of these materials by the petitioner for the purpose of execution of contract works have been assessed to tax under S.5A. Petitioner as well as the first respondent, assessing authority, were both under the impression that such purchases were exigible to tax under S.5A. The tax so assessed was paid by the petitioner.
(2.)Whileso,and on December l7, 1986, a Division Bench of this Court of which I was a member, held in the decision in Deputy Commissioner of Sales tax v. T. Anandan, 1987 (1) KLT 192 : (1987) 65 STC 349 that such purchases of goods from unregistered dealers for use in the execution of contract works will not attract the levy under S.5A, for the reason that the consumption envisaged by sub clause (a) of sub-s.(1) of the section was only consumption in the manufacture of other goods for sale and therefore the contingency adumbrated by the sub clause did not occur when the goods were consumed for other purposes. When a contractor constructed a building or erected sea wall, as in that case, he was not manufacturing any goods, and therefore the purchase of the materials used in the construction which became part of immovable property, could not be brought to tax under S.5A.
(3.)This decision was confirmed by the Supreme Court in Deputy Commissioner of Sales Tax (Law) v. Kannan Nair, 1988 (2) KLT 109 : (1988) 70 STC 48 on April 8, 1988.
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