H Y JADHAV Vs. COMMISSIONER OF COMMERCIAL TAXES, KARNATAKA, GANDH
LAWS(APH)-1992-9-75
HIGH COURT OF ANDHRA PRADESH
Decided on September 07,1992

H Y Jadhav Appellant
VERSUS
Commissioner Of Commercial Taxes, Karnataka, Gandh Respondents

JUDGEMENT

- (1.)The petitioner is a railway contractor. For the years 1977-78 to 1981-82, 1983-84 and 1984-85 the assessment was completed under section 12 (3) of the Karnataka Sales Tax Act, 1957 (Act) by exempting the turnover relating to supply of stone ballast and spreading out the same along the railway track. According to the assessing authority the transaction was in the nature of works contract and not supply contract. Subsequently, the Deputy Commissioner of Commercial Taxes (Admn. ) initiated suo motu proceedings under section 21 of the Act and issued show cause notice to the petitioner proposing to revise the assessment on the ground that the assessing authority was not justified in allowing the exemption in respect of the turnovers relating to supply of stone ballast to the railways. The revisional authority proceeded on the ground that since the petitioner was entrusted with the collecting and stacking of ballast in a particular manner along the railway track, it would be a contract for sale of goods. Hence relying upon the Full Bench decision of this Court in H. Y. Jadhav v. State of Karnataka [1981] 48 STC 496 the assessment was revised by reducing the exempted turnover relating to supply of stone ballast to the railways. The petitioner unsuccessfully challenged the said order before the Karnataka Appellate Tribunal, which agreed with the findings and order of the Deputy Commissioner. The petitioner being aggrieved by these orders has approached this Court for relief.
(2.)Sri Indrakumar, learned counsel for the petitioner, has urged that both the revisional authority and the Appellate Tribunal failed to appreciate that the work undertaken by the petitioner consisted of not merely supplying stone ballast but also spreading out (dumping) the same along the railway track. That, there is no difference between "collection and training out of ballast" and "collection and dumping of ballast" as clarified by the railway authorities under annexure K. As such the Tribunal has erred in holding that dumping of stone ballast does not amount to "training out". Strong reliance is placed upon the ruling of this Court in State of Mysore v. S. R. Bhide [1969] 24 STC 446.
(3.)On the contrary Sri H. L. Dattu, learned Government Advocate, sought to support the view taken by the authorities below, and submitted that on the facts and circumstances of the case the transaction between the railways is nothing but a contract of sale, namely, supply of stone ballast to the railways and not a works contract. Sri Dattu further submitted that the ratio of the Full Bench decision of this Court in H. Y. Jadhav v. State of Karnataka [1981] 48 STC 496 is applicable in all force to the facts of this case.
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