B. P. Jeevan Reddy, J. - (1.) Leave granted.
(2.) Section 5 of the Kerala General Sales Tax Act levies tax on sale or purchase of goods. Clause (iv) of sub-section (1) of Section 5 provides for levy of tax on transfer of goods involved in the execution of the works contract. Sub-clause (a) of Clause (iv) deals with a situation where "transfer is in the form of goods". In such a case, the rates and the point of levy are specified in the First, Second or Fifth Schedule to the Act, Sub-clause (b) deals with a situation where the "transfer of goods involved in the execution of works contract. . . . . . . . .is not in the form of goods but in some other form". In such a case, the rate is specified in the Fourth Schedule to the Act, There are two provisos to Clause (iv) which we need not refer to for the purpose of this case. Section 7 provides for payment of tax of compounded rates. We are concerned herein with sub-sections (7), (7A), (7B), (11) and (12) which were inserted along with certain other provisions by Act 23 of 1991 and Act 8 of 1992. Sub-section (7) provides: "Notwithstanding anything contained in sub-section (1) of Section 5, every contractor (engaged ) in civil works of construction of buildings, bridges, roads, dams and canals including any repair or maintenance of such civil works may at his option, instead of paying tax in accordance with Clause (iv) of that sub-section, pay tax at the rate of two per cent. on the whole amount of contract and which shall be deducted from the payments made by the awarder at every time including advance payment and shall remit to Government in such manner as may be prescribed."
(3.) Sub-section (7A) provides for a similar option to pay at a uniform specified rate in case of contractors not covered by sub-section (7). Sub-section (7A) reads: "(7A) Notwithstanding anything contained in sub-section (1) of Section 5 every contractor not covered by sub-section (7) may at his option, instead of paying tax in accordance with the said section, pay tax on the whole amount of contract at the rate of seventy per cent. of the rates shown in the Fourth Schedule against such contract, less any tax paid by him under this Act on the purchase of any goods used in such contract, the transfer of which to the works contract was effected without any processing or manufacture; (Proviso omitted as not relevant for the purpose of this case.);