(1.) THE petitioner-company has its registered office in Hyderabad in the State of Andhra Pradesh and is manufacturing steel strap systems in collaboration with Signode Corporation, U. S. A. It is an assessee registered under the Andhra Pradesh General Sales Tax Act, 1957 and the Central Sales Tax Act, 1956. The petitioner-company entered into three contracts with M/s. Tata Iron and Steel Company Limited (hereinafter referred to as TISCO), located in Jamshedpur in the erstwhile State of Bihar, but now in the State of Jharkhand. The first contract was for the supply of straps, seals, tools and spare parts.
(2.) ACCORDING to the petitioners, straps and seals are supplied directly from Hyderabad to TISCO, Jamshedpur, and the tools and spare parts are imported and supplied to TISCO from Hyderabad. It is collecting and paying tax on the sales under the Central Sales Tax Act. The petitioner has also entered into a contract with TISCO for service, examination, tests, adjustment, cleaning, oiling, etc. , of the tools which are being used at the work site of TISCO. Engineers and mechanics of the petitioner-company go to the site and do the servicing. The petitioner has yet another contract called unitisation contract which according to it is a service contract consisting of all jobs of strapping of billets and other steel items which are loaded in open wagons to make it single mass of steel, so that the mass cannot move or shift during shunting or movement of wagons. The job of unitisation is done by tools which are for tensioning the strap and then sealing it.
(3.) THE petitioner received a notice under section 33 (1) of the Bihar Finance Act, 1981 stating that on verification it was found that the petitioner-company was not submitting its return in relation to its works contract with TISCO. The petitioner was directed to appear before the Deputy Commissioner of Commercial Taxes, Urban Circle, Jamshedpur, to clarify the position. The petitioner appeared before the authority and put forward its case that no intra-State sale was involved in its works contract with Tisco. It was also put forward that the petitioner was not effecting any local sales within the State of Jharkhand and was not violating any of the provisions of the Bihar Finance Act. The petitioner also produced various documents in support of its case along with a detailed written representation. On being asked to file one more complete set of transactions between the parties, the petitioner filed the said documents. After hearing the petitioner and considering the relevant materials, the Deputy Commissioner, respondent No. 2, passed an order on August 31, 1989 holding that the contracts are one and the same; that sales took place in terms of the contract at Jamshedpur and as such the petitioner was exigible to sales tax under the Bihar Finance Act and directed that proceedings under section 17 (5) of the Act be started and this was followed by a notice under section 17 (5) of the Act. It was at that stage that the petitioner filed the present writ petition challenging the order of the Deputy Commissioner marked as annexure 6 and the notice under section 17 (5) of the Act produced as annexure 7.