SC in re Hume Pipe
FACTS
Xtracts >
"....However, the same was rejected by the Commercial Tax Officer vide his order dated September 26, 1994 making it clear to the assessee that the pipes manufactured and supplied by it fall within the definition of ‘sale of goods’ and that the contract is divisible in nature. 75% value of the contract was treated as consideration for sale of goods."
"......In addition, relying upon Rule 10B of the 1955 Rules, Mr. Datar contended that the assessee was entitled to characterisation of its contract under the said Rule and once this exercise is undertaken, it would be apparent that the contract in question was works contract, which was indivisible in nature.
countered the aforesaid submissions and maintained that the
works contract involved in this case is rightly held to be divisible in nature.
According to him, two types of work orders had been issued by the State
Government. As per those orders, the work of supply of pipes and the works for
contract of civil work are two different contracts in which the first part is
concerned with sale of pipes on which tax has been imposed in accordance with
the rates applicable to the pipes, and for which exemption certain cannot be
issued as supply in such cases falls within the definition of ‘sale’…"
ASIDE (own observations):
On a tentative perusal of the SC Judgment, so far as is seen, the levy of sales tax has been made on "75% value of the contract was treated as consideration for sale of goods."
ASIDE (own observations):
On a tentative perusal of the SC Judgment, so far as is seen, the levy of sales tax has been made on "75% value of the contract was treated as consideration for sale of goods."
.....................
Gannon
Builders Asscn.
XTRACTS
The interpretation which is to be assigned to clause 29-A of
Article
366 is stated with remarkable clarity in M/s
Larsen Toubro and another v. State of Karnataka and another[7], by a
three Judge Bench in the following words:
61. Viewed thus, a transfer of property in goods under
Clause 29A(b) of Article 366 is deemed to be a sale of the goods
involved in the execution of a works contract by the person making the transfer
and the purchase of those goods by the person to whom such transfer is made.
62. The States have now been conferred with the power to tax
indivisible contracts of works. This has been done by enlarging the scope of
"tax on sale or purchase of goods" wherever it occurs in the
Constitution. Accordingly, the expression "tax on the sale or purchase of
goods" in Entry 54 of List II of Seventh Schedule when read with the
definition Clause 29A, includes a tax on the transfer of property in goods
whether as goods or in the form other than goods involved in the execution of
works contract. The taxable event is deemed sale.
11. Prior to the Amendment of Article 366, in view of the
judgment of this Court In State of Madras v Gannon Dunkerley and Co., the State
could not levy sales-tax on sale of goods involved in a work's contract because
the contract was indivisible. All that has happened In law after the 46th
Amendment and the judgment of this Court in Builders case (supra) is that it is
now open to the States to divide the works contract into two separate contracts
by a legal fiction (i) contract for sale of goods involved in the said works
contract and (it) for supply of labour and service. This division of contract
under the amended law can be made only if the works contract involved a
dominant intention to transfer the property in goods and not in contracts where
the transfer in property takes place as an incident of contract of service. The
Amendment, referred to above, has not empowered the State to indulge in
microscopic division of contracts involving the value of materials used
incidentally in such contracts. What is pertinent to ascertain in this
connection is what was the dominant intention of the contract. Every contract,
be it a service contract or otherwise, may involve the use of some material or
the other in execution of the said contract. State is not empowered by the
amended law to impose sales-tax on such incidental materials used in such
contracts. This is clear from the judgment of this Court in Hindustan
Aeronautics Ltd. v. State of Karnataka [1984]2SCR248, where it was held thus:
Hindustan
Aeronautics Ltd. v. State of Karnataka [1984]2SCR248, where it was
held thus:
...Mere passing of property in an
article or commodity during the course of performance of the transaction in
question does not render the transaction to be transaction of sale. Even in a
contract purely of work or service, it is possible that articles may have to be
used by the person executing the work, and property in such articles or
materials may pass to the other party. That would not necessarily convert the
contract into one of sale of those materials. In every case, the Court would
have to find out what was the primary object of the transaction and the
intention of the parties while entering into it...."
The photographs are not marketable or saleable commodity and
as such no tax can be levied. Entry 25 of the Sixth Schedule to the Karnataka
Sales Tax Act, 1957, therefore is beyond the scope of Article
466 of the Constitution of India.
17) Within one year of the said judgment, this very issue
again cropped up for discussion and decision before a three Judge Bench in ACC
Ltd. case. The issue arose under the Customs
Act, 1962 viz. whether the drawings, designs etc. relating to
machinery or industrial technology were goods which were leviable to duty of
customs on their transaction value at the time of their report. However, since
the issue related to meaning that has to be given to the expression
"goods", the case law on this aspect including Gannon Dunkerley &
Kame's case were specifically taken note of and discussed. The Court also
noticed the effect of 46th Amendment and in the process commented upon the
judgment in the Rainbow Colour Lab's case. The Court specifically remarked that
Gannon Dunkerley & Kame's judgments were of pre 46th Amendment era which
had no relevance after the said Constitutional amendment. It can be discerned
from the following discussion contained therein:
…
"15. Thus, it is clear that
unless there is sale and purchase of goods, either in fact or deemed, and which
sale is primarily intended and not incidental to the contract, the State cannot
impose sales tax on a works contract simpliciter in the guise of the expanded
definition found in Article 366(29A)(b) read with Section
2(n) of the State Act. On facts as we have noticed that the work
done by the photographer which as held by this Court in Kame case is only in
the nature of a service contract not involving any sale of goods, we are of the
opinion that the stand taken by the respondent State cannot be sustained."
22. Even though in our opinion the
decisions relating to levy of sales tax would have, for reasons to which we
shall presently mention, no application to the case of levy of customs duty,
the decision in Rainbow Colour Lab case (supra) requires consideration. As a
result of the Forty-sixth Amendment, sub-article
29A of Article 366 was inserted as a result whereof tax
on the sale or purchase of goods was to include a tax on the transfer of
property in goods (whether as goods or in some other form) involved in the
execution of a works contract. Taking note of this amendment this Court in
Rainbow Colour Lab at page 388-389 observed as follows:
23. In arriving at the aforesaid
conclusion the Court referred to the decision of this Court in Hindustan
Aeronautics Ltd. vs. State of Karnataka (1984) a SCC 706 and Everest
Copier (supra). But both these cases related to pre-Forty-sixth Amendment era
where in a works contract the State had no jurisdiction to bifurcate the
contract and impose sales tax on the transfer of property in goods involved in
the execution of a works contract. The Forty-sixth Amendment was made precisely
with a view to empower the State to bifurcate the contract and to levy sales
tax on the value of the material involved in the execution of the works
contract, notwithstanding that the value may represent a small percentage of
the amount paid for the execution of the works contract. Even if the dominant
intention of the contract is the rendering of a service, which will amount to a
works contract, after the Forty-sixth Amendment the State would now be
empowered to levy sales tax on the material used in such contract. The
conclusion arrived at in Rainbow Colour Lab case, in our opinion, runs counter
to the express provision contained in Article
366 (29A) as also of the Constitution Bench decision of this Court
in Builders'
Association of India and Others vs. Union of India and Others (1989)
2 SCC 645." [emphasis supplied]
18) It is amply clear from the above
and hardly needs clarification …
19) In view of the above, the
argument of the respondent assessees that ACC Ltd. case did not over-rule
Rainbow Colour Lab's case is, therefore, clearly misconceived. In fact, we are
not saying so for the first time as a three member Bench of this Court in M/s
Larsen and Toubro has already stated that ACC Ltd. had expressly over-ruled
Rainbow Colour Lab while holding that dominant intention test was no longer
good test after 46th Constitutional Amendment. We may point out that learned
counsel for the respondent assessees took courage to advance such an argument
emboldened by certain observations made by two member Bench in the case of C.K.
Jidheesh v. Union of India[8], wherein the Court has remarked that
the observations in ACC Ltd. were merely obiter. In Jidheesh, however, the
Court did not notice that this very argument had been rejected earlier in Bharat
Sanchar Nigam Ltd. v. Union of India[9]. Following discussion in
Bharat Sanchar is amply demonstrative of the same:
"46. This conclusion was
doubted in Associated Cement Companies Ltd. v. Commissioner of Customs,
(2001) 4 SCC 593 saying:
47. We agree. After the 46th Amendment, the sale element of
those contracts which are covered by the six sub-clauses of Clause (29A) of Article
366 are separable and may be subjected to sales tax by the States
under Entry 54 of List II and there is no question of the dominant nature test
applying. Therefore, in 2005, C.K. Jidheesh v. Union of India - (2005) 8 SCALE
784 held that the aforesaid observations in Associated Cement (supra) were
merely obiter and that Rainbow Colour Lab (supra) was still good law, it was
not correct. It is necessary to note that Associated Cement did not say that in
all cases of composite transactions the 46th Amendment would apply"
66. It then clarified that Gannon
Dunkerley-I survived the Forty-sixth Constitutional Amendment in two respects.
First, with regard to the definition of "sale" for the purposes of
the Constitution in general and for the purposes of Entry 54 of List II in
particular except to the extent that the clauses in Article
366(29A) operate and second, the dominant nature test would be
confined to a composite transaction not covered by Article
366(29A). In other words, in Bharat Sanchar, this Court reiterated
what was stated by this Court in Associated Cement that dominant nature test
has no application to a composite transaction covered by the clauses of Article
366(29A). Leaving no ambiguity, it said that after the Forty- sixth
Amendment, the sale element of those contracts which are covered by six
Sub-clauses of Clause 29A of Article 366 are separable and may be subjected to
sales tax by the States under Entry 54 of List II and there is no question of
the dominant nature test applying.
67. In view of the statement of law
in Associated Cement and Bharat Sanchar, the argument advanced on behalf of the
Appellants that dominant nature test must be applied to find out the true
nature of transaction as to whether there is a contract for sale of goods or
the contract of service in a composite transaction covered by the clauses of Article
366(29A) has no merit and the same is rejected.
70. The Forty-sixth Amendment leaves
no manner of doubt that the States have power to bifurcate the contract and
levy sales tax on the value of the material involved in the execution of the
works contract. The States are now empowered to levy sales tax on the material
used in such contract. In other words, Clause 29A of Article
366 empowers the States to levy tax on the deemed sale."
21) To sum up, it follows from the
reading of the aforesaid judgment that after insertion of clause 29-A in Article
366, the Works Contract which was indivisible one by legal fiction,
altered into a contract, is permitted to be bifurcated into two: one for
"sale of goods" and other for "services", thereby making
goods component of the contract exigible to sales tax. Further, while going
into this exercise of divisibility, dominant intention behind such a contract,
namely, whether it was for sale of goods or for services, is rendered otiose or
immaterial. It follows, as a sequitur, that by virtue of clause 29-A of Article
366, the State Legislature is now empowered to segregate the goods
part of the Works Contract and impose sales tax thereupon. It may be noted that
Entry 54, List II of the Constitution of India empowers the State Legislature
to enact a law taxing sale of goods. Sales tax, being a subject-matter into the
State List, the State Legislature has the competency to legislate over the
subject.
23) It was also argued that
photograph service can be exigible to sales tax only when the same is
classifiable as Works Contract. For being classified as Works Contract the
transaction under consideration has to be a composite transaction involving
both goods and services. If a transaction involves only service i.e. work and labor then the same cannot be treated as Works Contract. It was contended that
processing of photography was a contract for service simplicitor with no
elements of goods at all and, therefore, Entry 25 could not be saved by taking
shelter under clause 29-A of Article 366 of the Constitution. For this
proposition, umbrage under the judgment in B.C. Kame's case was sought to be
taken wherein this Court held that the work involving taking a photograph,
developing the negative or doing other photographic work could not be treated
as contract for sale of goods. Our attention was drawn to that portion of the
judgment where the Court held that such a contract is for use of skill and
labour by the photographer to bring about desired results inasmuch as a good
photograph reveals not only the asthetic sense and artistic faculty of the photographer,
it also reflects his skill and labour. Such an argument also has to be rejected
for more than one reasons. In the first instance, it needs to be pointed out
that the judgment in Kame's case was rendered before the 46th Constitutional
Amendment. Keeping this in mind, the second aspect which needs to be noted is
that the dispute therein was whether there is a contract of sale of goods or a
contract for service. This matter was examined in the light of law prevaling at
that time, as declared in Dunkerley's case as per which dominant intention of
the contract was to be seen and further that such a contract was treated as not
divisible. It is for this reason in BSNL and M/s Larsen and Toubro cases, this
Court specifically pointed out that Kame's case would not provide an answer to
the issue at hand. On the contrary, legal position stands settled by the
Constitution Bench of this Court in Kone
Elevator India Pvt. Ltd. v. State of Tamil Nadu and Ors.[10].
Following observations in that case are apt for this purpose: "On the
basis of the aforesaid elucidation, it has been deduced that a transfer of
property in goods under Clause (29A)(b) of Article 366
is deemed to be a sale of goods involved in the execution of a Works Contract
by the person making the transfer and the purchase of those goods by the person
to whom such transfer is made. One thing is significant to note that in Larsen
and Toubro (supra), it has been stated that after the constitutional amendment,
the narrow meaning given to the term "works contract" in Gannon
Dunkerley-I (supra) no longer survives at present. It has been observed in the
said case that even if in a contract, besides the obligations of supply of
goods and materials and performance of labour and services, some additional
obligations are imposed, such contract does not cease to be works contract, for
the additional obligations in the contract would not alter the nature of the
contract so long as the contract provides for a contract for works and
satisfies the primary description of works contract. It has been further held
that once the characteristics or elements of works contract are satisfied in a
contract, then irrespective of additional obligations, such contract would be
covered by the term "works contract" because nothing in Article
366(29A)(b) limits the term "works contract" to contract
for labour and service only."
24) Another attack on the insertion
of Entry 25 pertained to retrospectivity given to this provision. It was sought
to be argued that amendment to the Act was made by Karnataka State Laws Act,
2004 which came into force w.e.f. 29.01.2004 and insertion of Entry 25 with
retrospective effect i.e. w.e.f. 01.07.1989 was not permissible. To put it
otherwise, the argument was that even if Entry 25 is held to be valid, it
should be made prospective i.e. w.e.f. 29.01.2004. According to the learned
senior counsel, Entry 25 with retrospective effect is onerous on the
respondents and if the respondents are directed to pay these amounts, they will
face severe financial crisis. Such an onerous provision, in their submission,
would violate the fundamental rights of the respondents guaranteed under Article
19(1)(g) which guarantees freedom to carry on trade, business or
profession.
25) We are afraid,
26) Position stated above has to be
read in the context that the legislature is, otherwise, competent to pass
amendments of this nature from retrospective effect. The principle that such a
power exists with the legislature has been reiterated time and again by this
Court. [See: (1) National Agricultural Co-operative Marketing Federation of
India Ltd. and Anr. v. Union of India[11], (2) Shri
Prithvi Cotton Mills Ltd. and Anr. v. Broach Borough Municipality and Ors.[12],
(3) Indian Aluminium Co. etc. etc. v. State of Kerala and others, (4) Hiralal
Rattanlal etc. etc. v. State of U.P. and Anr. etc. etc.[13] and (5) Union of
India (UOI) and Anr. v. Raghubir Singh (Dead) by Lrs. Etc.[14]]. It
is not necessary to discuss all these judments and our purpose would be served
by extensively quoting from the case in National Agricultural Co-operative
Marketing Federation of India Ltd.:
"13. That the Legislature can
enact laws retrospectively is not in dispute. Nor is it disputed that the
amendment is intended to be retrospective and that the amendment would at least
prospectively exclude all cooperative societies except the primarily society
from the benefit of Section 80P(2)(a)(iii) of the Income Tax Act.
According to the appellants, the amendment cannot be considered to have
retrospective operation in the absence of a validating provision nor could
Parliament reverse the judgment of this Court by such statutory overruling. If
the amendment is construed as having retrospective operation, then, it is submitted,
the amendment is unconstitutional because it seeks to impose a tax on apex
societies for the last 31 years, it was contended that by denying the deduction
to the apex societies, the farmers and the primary societies would be vitally
affected as it would be reflected in the returns obtained by them. This would
be contrary to the legislative intent which was to benefit all societies which
market agricultural produce.
xx xx xx
28. The test of the length of time
covered by the retrospective operation cannot by itself, necessarily be a
decisive test. Rai Ramkrishna and Ors. v. The State of Bihar,
[1963] 50 ITR 171 (SC) Account must be taken of the surrounding facts and
circumstances relating to the taxation and the legislative background of the
provision. Jawahamal v. State of Rajasthan: [1966] 1 SCR 890 To recapitulate
the legislative background of the particular statutory provision in question
before us - the first authoritative interpretation of Section
80P(2)(a)(iii) was made in 1994 in Assam Cooperatives Supra when it
held that the word "of" must be construed as "produced by".
Therefore, the law as it stood from 1968 was, by the decision, required to be
read in precisely this manner and presumably assessments of Apex Societies were
commended and concluded on this basis. The situation continued till 1998 till
this Court reversed Assam Cooperatives in Kerala Cooperative Marketing
Federation Ltd. Supra. Before the assessment year was over, by the 1998
Amendment the word "of" was substituted with "given by". In
real terms therefore there was hardly any retrospectivity, but a continuation
of the status quo ante. The degree and extent of the unforeseen and
unforeseeable financial burden was, in the circumstances, minimal and cannot be
said to be unreasonable or unconstitutional.
27) We would also like to refer to
the case of Hiralal Ratanlal v. State of U.P.[15], wherein it
was observed "the source of the legislative power to levy sales or
purchase tax on goods is Entry 54 of the List II of the Constitution. It is
well settled that subject to Constitutional restrictions a power to legislate
includes a power to legislate prospectively as well as retrospectively. In this
regard legislative power to impose tax also includes within itself the power to
tax retrospectively."
28) We would like to point out at
this stage that the High Court in the impugned judgment has not dealt with the
mater in its correct perspective. The reason given by the High Court in
invalidating Entry 25 is that this provision was already held unconstitutional
by the said High Court in Keshoram's case against which the SLP was also
dismissed and in view of that decision, it was not permissible for the
legislature to re-enact the said Entry by applying a different legal principle.
According to us, this was clearly an erroneous approach to deal with the issue
and the judgment of the High Court is clearly unsustainable. The High Court did
not even deal with various facets of the issue in their correct perspective, in
the light of subsequent judgments of this Court with specific rulings that
Rainbow Colour Lab is no longer a good law.
29) The impugned judgment of the
High Court is accordingly set aside, the present appeal is allowed and as a
result thereof, the writ petitions filed by the respondents in the High Court
are dismissed holding that Entry 25 of Schedule VI of the Act is
constitutionally valid. There shall, however, be no order as to costs.
.............................................CJI
(H.L. DATTU) .............................................J.
(A.K. SIKRI)
.............................................J.
(ARUN MISHRA) NEW DELHI;
JANUARY 30, 2015.
[1] 121 (2001) STC 175 [2] (2000) 2 SCC 385 [3] (2001) 4 SCC
593 [4] ILR 2003 Kar 4883 [5] (1993) 1 SCC 364 [6] (1989) 2 SCC 645 [7] (2014)
1 SCC 708 [8] (2005) 13 SCC 37 [9] (2006) 3 SCC 1 [10] (2014) 7 SCC 1 [11]
(2003) 5 SCC 23 [12] (1969) 2 SCC 283 [13] (1973) 1 SCC 216 [14] (1989) 2 SCC
754 [15] (1973) 1 SCC 216
FACEBOOK
At the outset, the first and
foremost point requiring to be made a special note is that the SC Judgment has
been handed down in civil appeal proceedings. As such, in the proceedings both
before the lower courts and the apex court, the deeming provisions have been
addressed and argued on the premise that the constitutional validity /
propriety of such provisions is no longer open to be agitated or re argued-
that is, no longer res integra. To put it differently, if at all considered to
be worth agitating or re agitating, then the only recourse is to have all the
related issues taken , afresh, before the SC in writ proceedings.
For such a purpose, the input
viewpoints as canvassed in the two write-ups @ the Links below, may be summoned
for help/ made appropriate use of :
<> http://swaminathanv208.blogspot.in/…/deeming-legal-fiction.…
<> http://swaminathanv208.blogspot.in/…/deeming-legal-fiction-…
<> http://swaminathanv208.blogspot.in/…/deeming-legal-fiction-…
Now, Back to the instant case:
Needs a close study; having in mind
the ongoing controversy wrt levy of service tax, on the 'deemed works contract'
in respect of a realty transaction; that was contested to be an invisible
contract, for sale of an 'immovable property. The common factor, if at all any,
is that there is a 'deeming' concept invoked. But the fine points of
distinction are more than one. In the instant case the main plank of argument
on behalf of taxpayer has been that the contract is a composite 'works
contract', indivisible ; and cannot be split so as to levy sales tax by deeming
any part of it as for a 'sale of goods'. In contrast, in the other realty
related case, the taxpayer's contention has been that the contract was for sale
of 'immovable property'; and cannot be split by deeming any portion of it as a
'works contract', so as to levy VAT and SERVICE TAX on such portions as for
'sale of goods' and 'supply of services for construction', respectively.
Full TEXT of the JUDGMENT @ https://indiankanoon.org/doc/91401411/
KEY Note (on a tentative perusal):
As noted, the eminent Advocate has,
in addressing his arguments, cited/relied on case law, including the case of
'Kone Elevator' adjudicated upon by the SC. Nonetheless, the matter has been
decided in Revenue's favor accepting the pleas on its behalf. In short, held
that, - the judgment in Kone Elevator case is not applicable. Instead, the
judgment in the matter of State of Karnataka and Others v. Pro Lab and Others
has been followed, to be applicable.
Not unsurprisingly, the case law
cited and relied upon by both the sides include all those leading earlier
Judgments for or against the proposition (s) respectively urged by the
disputant - taxpayer or the Revenue - not excluding the case law on the 'deemed
works contract' in regard to transactions in Realty sector.
CROSS Refer:
On the Constitutional Amendment
found repeatedly referred, if so itching to know more: https://www.google.co.in/url…
Briefly stated: This deserves to be
specially marked as an instance, - rather as one more of the instances ,
galore, in which the vexing inconsistency in judicial views happened to have
been touched upon; say @ -https://www.facebook.com/swaminathanv3/posts/1466739346735680?pnref=story
Xtracts from Bansals' case :
Is it not arguable that the levy of GST on 'ongoing' (building construction) project is illegal / illegitimate , hence ulra vires, in laying down that one-third of the consideration shall be 'DEEMED to be the 'cost of land', on a rule of thumb basis" ?
For, how /why such an arbitrary rule fixing the value of land to be excluded, and taxing the balance as for "DEEMED WORKS CONTRACT" ,- having no regard to the reality that the 'value' of land is quite likely - factually /actually - not be uniform, but vary, with no definiteness, on a case to case basis- be rightly regarded to squarely meet / fully satisfy one -the fourth -of the essential components , which, according to case law (see above), is required to be clearly and definitely ascertain -able (ed) !
KEY NOTE:
In L&T SC case @
https://indiankanoon.org/doc/38073485/
A Revisit (Is a MUST) >
REASON < Why so strong as not to justifiably regard otherwise, quite a few of the SC cases cited / followed, especially SC in Heinz case ( https://indiankanoon.org/doc/95535966/ )could be urged to more than amply support; and, the conclusive observations of the SC in para. 43, have to be regarded to lend adequate credence /credibility for taking such a stance (?!).
<> Para 35 (excerpt) - ".... However, in cases where the statute was completely discriminatory or provides no procedural machinery for assessment and levy of tax OR WHERE IT WAS CONFISCATORY , THE COURT WOULD BE JUSTIFIED IN STRIKING IT DOWN AS UNCONSTITUTIONAL. In such cases the character of the material provisions of the impugned statute may be such as may justify the Court taking the view that in substance the taxing statute IS A CLOAK ADOPTED BY THE LEGISLATURE FOR ACHIEVING ITS CONFISCATORY PURPOSE " (FONT supplied- with double emphasis on "OR" )
The obvious implication is that, - even if were to proceed that the exclusion of land value on an arbitrary basis (see Key Point supra) meets with the mandated requirement of a procedural machinery for assessment and levy of tax, it could be still be validly urged , the levy is 'unconstitutional' on inter alia the ground that it is 'confiscatory' (verging on detestable 'tax terrorism' (extortion-ism !)of its kind, - having been rooted on convoluted logic)!
(Better the apex court so declares,to restore the constitutional propriety, fully and finally,in a time-bound manner; in preference to leaving it to being litigated until the D'day of redemption!)
CROSS refer (related topic) @
http://vswaminathan-swamilook.blogspot.in/2018/01/levy-of-st-gst-on-housing-complex-contd.html
<><><><>
RESOURCES (related) >
Legslators
Judicary
- i.e, BENCH
and /or BAR
REF. NAP's
Archangels as
PROVIDENCE - Obedience to
RELATED
b/f FB
Previous-
http://vswaminathan-swamilook.blogspot.in/2017/11/law-makers-in-changed-times-who-are-they.html
>>>>
https://www.facebook.com/swaminathanv3/posts/1480710705338544?pnref=story
<> Who are the progressive 'lawmakers' reported to have joined the public rally !- Going by honorable guess, - it could not just be any of , or none of those, who are formally elected and supposed to act as PEOPLE's representatives in the Legislative bodies; perhaps, most probably, belonging to those other categories of !!
Xtracts from Bansals' case :
46. In Mathuram Agrawal v. State of M.P.: (1999) 8 SCC 667, the
Supreme Court held as under:-
―In a taxing Act it is not possible to assume any intention or governing purpose of the statute more than what is stated in the plain language. It is not the economic results sought to be obtained by making the provision which is relevant in interpreting a fiscal statute. Equally impermissible is an interpretation which does not follow from the plain, unambiguous language of the statute. Words cannot be added to or substituted so as to give a meaning to the statute which will serve the spirit and intention of the legislature. The statute should clearly and unambiguously convey the three components of the tax law i.e. the subject of the tax, the person who is liable to pay the tax and the rate at which the tax is to be paid. If there is any ambiguity regarding any of these ingredients in a taxation statute then there is no tax in law. Then it is for the legislature to do the needful in the matter.‖
47. A similar view was expressed by the Supreme Court in Govind
Saran Ganga Saran v. CST: (1985) 155 ITR 144 ( SC) wherein the Court
held as under:-
―6. The components which enter into the concept of a tax are well known. The first is the character of the imposition known by its nature which prescribes the taxable event attracting the levy, the second is a clear indication of the person on whom the levy is imposed and who is obliged to pay the tax, the third is the rate at which the tax is imposed, and the fourth is the measure or value to which the rate will be applied for computing the tax liability. If those components are not clearly and definitely ascertainable, it is difficult to say that the levy exists in point of law. Any uncertainty or vagueness ill the legislative scheme defining any of those components of the levy will be fatal to its validity.‖
48. In Commissioner Central Excise and Customs, Kerala v. Larsen &
Toubro Ltd. (supra), the Supreme Court considered the question whether
service tax could be levied on indivisible works contract under clauses (g),
(zzd), (zzh), (zzq) and (zzzh) of sub-section 105 of Section 65 of the Act.
The Court referred to various earlier decisions on the question whether a
levy of tax could be sustained in absence of the machinery provisions and
held that since neither the Act nor Rules provided for any machinery
provisions to exclude the non-service element from a composite contract,
the taxable services referred in clauses (g), (zzd), (zzh), (zzq) and (zzzh) of
sub-section 105 of Section 65 of the Act could only refer to services in
relation to a service contract simplicitor and not to composite contracts.
The relevant extract of the said decision is quoted below:-
Is it not arguable that the levy of GST on 'ongoing' (building construction) project is illegal / illegitimate , hence ulra vires, in laying down that one-third of the consideration shall be 'DEEMED to be the 'cost of land', on a rule of thumb basis" ?
For, how /why such an arbitrary rule fixing the value of land to be excluded, and taxing the balance as for "DEEMED WORKS CONTRACT" ,- having no regard to the reality that the 'value' of land is quite likely - factually /actually - not be uniform, but vary, with no definiteness, on a case to case basis- be rightly regarded to squarely meet / fully satisfy one -the fourth -of the essential components , which, according to case law (see above), is required to be clearly and definitely ascertain -able (ed) !
KEY NOTE:
In L&T SC case @
https://indiankanoon.org/doc/38073485/
A Revisit (Is a MUST) >
REASON < Why so strong as not to justifiably regard otherwise, quite a few of the SC cases cited / followed, especially SC in Heinz case ( https://indiankanoon.org/doc/95535966/ )could be urged to more than amply support; and, the conclusive observations of the SC in para. 43, have to be regarded to lend adequate credence /credibility for taking such a stance (?!).
<> Para 35 (excerpt) - ".... However, in cases where the statute was completely discriminatory or provides no procedural machinery for assessment and levy of tax OR WHERE IT WAS CONFISCATORY , THE COURT WOULD BE JUSTIFIED IN STRIKING IT DOWN AS UNCONSTITUTIONAL. In such cases the character of the material provisions of the impugned statute may be such as may justify the Court taking the view that in substance the taxing statute IS A CLOAK ADOPTED BY THE LEGISLATURE FOR ACHIEVING ITS CONFISCATORY PURPOSE " (FONT supplied- with double emphasis on "OR" )
The obvious implication is that, - even if were to proceed that the exclusion of land value on an arbitrary basis (see Key Point supra) meets with the mandated requirement of a procedural machinery for assessment and levy of tax, it could be still be validly urged , the levy is 'unconstitutional' on inter alia the ground that it is 'confiscatory' (verging on detestable 'tax terrorism' (extortion-ism !)of its kind, - having been rooted on convoluted logic)!
(Better the apex court so declares,to restore the constitutional propriety, fully and finally,in a time-bound manner; in preference to leaving it to being litigated until the D'day of redemption!)
CROSS refer (related topic) @
http://vswaminathan-swamilook.blogspot.in/2018/01/levy-of-st-gst-on-housing-complex-contd.html
<><><><>
RESOURCES (related) >
"Law Makers" - in changed times WHO ARE THEY ?
Judicary
- i.e, BENCH
and /or BAR
REF. NAP's
Archangels as
PROVIDENCE - Obedience to
RELATED
b/f FB
Previous-
http://vswaminathan-swamilook.blogspot.in/2017/11/law-makers-in-changed-times-who-are-they.html
>>>>
https://www.facebook.com/swaminathanv3/posts/1480710705338544?pnref=story
<> Who are the progressive 'lawmakers' reported to have joined the public rally !- Going by honorable guess, - it could not just be any of , or none of those, who are formally elected and supposed to act as PEOPLE's representatives in the Legislative bodies; perhaps, most probably, belonging to those other categories of !!
