COOCH BEHAR CONTRACTORS' ASSOCIATION AND ORS. ETC. versus STATE OF WEST BENGAL AND ORS.

Citation: [1996] SUPP. 6 S.C.R. 57 · Decided: 11-09-1996 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Dismissed

Judgment (excerpt)

• 
COOCH BEHAR CONTRACTORS' ASSOCIATION 
AND ORS. ETC. 
v. 
STATE OF WEST BENGAL AND ORS. 
SEPTEMBER 11, 1996 
[S.P. BHARUCHA AND K. VENKATASWAMI, JJ.] 
Sales Tax Law: 
A 
B 
Bengal Finance (Sales Tax) Act, 1941: Sections 2(c) and 6-D. 
C 
Sales TOJ..~Declaration forms-Denial of-To dealers under S.6-
D-While advantage of using such forms was available to other 
dealers-Held: not violative of A1ticle 14 of Constitution-Constitution of 
India, 1950, A1ticles 14 and 366(29- A). 
Section 6-D-Scope of-Held : was a complete code so far as dealers in 
works contract were concemed--Hence, such dealers were not entitled to any 
concession other than those enumerated in S.6-D. 
"Contractual transfer p1ice''-Goods supplied to contractor by contrac-
tee and p1ice recovered from colllractor by way of adjustment-Held : value 
of such goods covered under "contractual transfer p1ice". 
"Contractual transfer p1ice''-Royalty-Paid by contractor in the execu-
tion of w01*s contract while procuring boulders, e01th etc.-Includibility 
of-Held : royalty amounted to payment of p1ice for goods obtained from the 
Govemment Depaltments and used in the works contract-Hence, includible 
in "contractual tramfer price". 
"Contractual transfer price''-Cost of'freight and delive1y for canying 
goods to work site-Includibility of-Question left open. 
Words and Phrases : "Contractual tram.fer price''-!vleaning of-In the 
context of Section 6-D of the Bengal Finance (Sales Tax) Act, 1941. 
The appellants were contractors who executed civil construction 
, works under different departments of the Central and State Governments 
D 
E 
F 
G 
as well as Corporations. The Revenue sought to assess the appellants H 
57 
58 
SUPREME COURT REPORTS (1996) SUPP. 6 S.C.R. 
A 
under Section 6-D of the Bengal Finance (Sales Tax) Act, 1941. The 
appellants filed a petition before the Taxation Tribunal challenging such 
assessment. The Tribunal dismissed the petition. Being aggrieved the 
appellants preferred the present appeal. 
B 
c 
D 
On behalf of the appellants it was contended that denial to dealers 
under Section 6-D c)f the Act the use of declaration forms which had been 
made available to other dealers was violative of the Constitution; that the 
value of the stores.and materials supplied by the contractee to the contrac-
tor should not be included in the "contractual transfer price" under Section 
6-D of the act; that the royalty paid by the contractor in the execution of 
works contract while procuring boulders, earth etc. should not be included 
in the 'contractual transfer price'; and that cost of freight and delivery for 
carrying goods to the work site should not be included in the 'contractual 
transfer price'. 
Dismissing the appeal, this Court 
HELD : 1.1. Section 6-D of the Bengal Finance (Sales Tax) Act, 1941 
is a self-contained code so far as dealers in works contract are concerned. 
Whatever concessions the Legislature wanted to extend to such dealers were 
enumerated in clauses (a) to (e) of Section 6-D(2) of the Act. Moreover, 
E 
having regard to the non-obstante clause used in Section 6-D, it is clear that 
no further concession was intended to be extended to the dealers in works 
contract. As t~ey form a class by themselves, they cannot compare themsel-
ves with other dealers coming under sections 4 or 5 and allege discrimina-
tion to invoke Article 14 of the Constitution of India. [63-H; 64-A-B] 
. F 
Gannon Dunkerley and Co. v. State of Rajasthan, [1993) 1 SCC 364, 
G 
relied on. 
Builders Association of India and Others v. Union of India and Others, 
[1989) 2 sec 645, referred to. . 
1.2. The Tribunal bas found the contractor has to pay the price of 
the goods supplied by the contractee by way of adjustment. It is, therefore, 
clear that goods used in the execution of the works contract stand trans-
ferred from the contractor to the contractee at the time the goods are 
incorporated in the construction and the value of such goods is covered, 
H under the 'contractual transfer price'. [65-E; H] 
COOCHBEH.ARCONTRACTORS'.ASSN. v.ST.ATE[VENKATASWAMI,J.}59 
N.M. Goel & Co. v .. Sales Tax Officer & Anr., 72 STC 375, relied on. A 
2.1. The payment of royalty in the execution of works contract while 
procuring boulders, earth etc. amounts to payment of price for the goods 
obtained from the Government Departments and used in the works con-
tract, and covered under 'contractual transfer price'. [66-D] 
State of Madhya Pradesh v. Orient Paper Mills

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