Gopal Krishan Vyas, J. - (1.) INSTANT sales tax revision petition has been filed under Section 86(2) of the Rajasthan Sales Tax Act, 1994 against the judgment dated June 18, 2008 passed by the learned Tax Board, Ajmer, by which the Tax Board dismissed the appeal filed by the Petitioner -Department and confirmed the order dated July 20, 2007 passed by the Deputy Commissioner (Appeals), Jodhpur, in which, interest and penalty order dated March 1, 2007 passed by the assessing authority has been quashed.
(2.) BRIEF facts of the revision are that certain construction work was assigned by the Union of India through its agency, Central Public Works Department to the contractors and for the purpose of construction various contractors were supplied certain materials as per terms and conditions of the contract such as cement, etc. The controversy with regard to question of supply of the material for the purpose of construction to the contractors by the CPWD can be treated to be sale or not was finally adjudicated by the Supreme Court in bunch of civil appeals filed by the Karya Palak Engineer, C.P. W.D., Bikaner v. Rajasthan Taxation Board decided on August 12, 2004, reported in : (2004) 136 STC 641 (SC); Tax Up -Date Vol. IX Pt. 8. In the said judgment, the honourable Supreme Court has held that the Union through its agency Central Public Works Department undertook the work of erection of barbed wire fencing along the Indo -Pak border from 1991 onwards in the State of Rajasthan. In order to get the construction work done the Appellant awarded contracts to various contractors and under the terms and conditions of the said contract it had agreed to supply the contractors materials such as cement, barbed wire, M.S. angles, etc. The apex court held that in the use or consumption of material supplied in the work of construction, there was passing of property and by virtue of receipt of value of such transferred property by way of adjustment in bills the consideration has also passed which satisfies the definition of "sale" in the local Sales Tax Act.
(3.) THEREFORE , in view of the above judgment, the assessing authority passed the order of assessment from the year 1996 onward and the assessing authority imposed tax, penalty, interest and penalty under Section 59, penalty under Section 61 of the Sales Tax Act vide assessment order dated March 1, 2007. Against the said order passed by the assessing authority, appeal was preferred by the Respondent before the Deputy Commissioner (Appeals), Jodhpur, who, vide order dated July 20, 2007 partly allowed the appeal of the Respondent and while following the judgment of the apex court in the case of Karya Palak Engineer, C.P.W.D., Bikaner : (2004) 136 STC 641 (SC); Tax Up -Date Vol. IX Pt. 8 confirmed the order of the assessing authority so far it relates to tax but quashed the order of interest and penalty and remitted the matter to the assessing authority for deciding the question of interest from the date of judgment of the apex court which is August 12, 2004; and, for the purpose of penalty imposed under Section 61 of the Act of 1994 it has been held that the said penalty has not been imposed in accordance with law, therefore, set aside the order of penalty imposed under Section 61 and further upheld the penalty imposed under Section 59 by the assessing authority.;