M/S. MAHIM PATRAM PRIVATE LTD. versus UNION OF INDIA & ORS.

Citation: [2007] 3 S.C.R. 73 · Decided: 23-02-2007 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed

Cited by 2 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

.\ 
MIS. MAHIM PATRAM PRIVATE LTD. 
A' 
v. 
UNION OF INDIA & ORS. 
FEBRUARY 23, 2007 
[S.B. SINHA AND MARKANDEY KA TJU, JJ.] 
B 
U.P. Trade Tax Act, 1948: Section 3-F(J) 
Sales tax-AYs 2002-03 and 2003-04-Works contract-Levy of sales 
tax on-Sale price-Manner of determinatio~Assessee was engaged in the C 
printing of question papers for examination hoards, competitive examination 
hoards and various universities and boards situated outside the State-
Activities of the assessee admittedly amounted to a works contract in the 
course of inter-State trade or commerce-Works contract, as an item of sale, 
was introduced in S. 2(g) of the Central Sales Tax Act-But no rule has been D 
framed in regard to the manner in which the sale price of the value of the 
goods involved in the works contract was to be calculated-However, the 
Assessing Authority, relyiny on S. 9(2) of the 1956 Act, applied the provisions 
of the 1948 Act and the rules framed thereunder for calculating the sale price 
of the value of the goods involved in the works contract-Assessee filed writ E 
petition challenging the assessment order-High Court dismissed the writ 
petition-Correctness of-Held: Sales tax is an indirect tax-It is leviahle on 
transfer of goods-So long as the Central Government has not made any 
rules, the determination of turnover may he carried out by the Assessing 
Authority in terms of the State Rules in view of S. 13(3) of the 1956 Act read 
with R. 9 of the 1957 Rules-Hence, an assessee or a dealer cannot derive F 
any benefit by reason of non-framing of any rule which is contemplated under 
the 1956 Act-High Court judgment upheld-Central Sales Tax Act, 1956, 
Ss. 2(g), 8, 8(A), 9 & 13-U.P. Trade Tax Rules, 1948, Rr. 44-B and 44-C-
Central Sales Tax (U.P.) Rules, 1957, R. 9-Finance Act, 2005, Ss. 2 & 13. 
Words & Phrases: 
G 
'[ 
"Works contract"-Meaning of-In the context of Section 2(g)(ii) of 
the Central Sales Tax Act, 1956. 
The appellant is engaged, inter a/ia, in the printing of question papers H 
73 
74 
SUPREME COURT REPORTS 
[2007] 3 S. C.R. 
A for examination boards, competitive examination boards, recruitment boards 
and various universities and boards situated outside the State. The activities 
... ...._ 
of the appellant admittedly amounted to a works contract in the course of inter-
State trade or commerce. 
The Central Sales Tax Act, 1956 did not contain any provision to levy 
B tax on works contract. However, Section 2(g) of the 1956 Act was amended by 
the Finance Act, 2002 whereby and where under works contract was 
introduced, as an item of sale, in the 1956 Act. But no rule has, till date, been 
framed in regard to the manner in which the sale price of the value of the 
goods involved in the execution of a works contract was to be calculated. 
c 
The Assessing Authority, however, relying on or on the basis of Section 
9(2) of the 1956 Act applied the provisions of the Uttar Pradesh Trade Tax 
Act, 1948 and the rules framed thereunder for calculating the sale price of 
the transfer of property in the goods involved in the execution of the works 
contract in the course of inter-State trade and commerce for the Assessment 
D Years 2002-03 and 2003-04. 
E 
F 
G 
H 
The appellant filed a writ petition before the High Court challenging 
the said assessment order. The High Court dismissed the writ petition. Hence 
the appeal. 
The following question arose before the Court:-
Whether there exist sufficient guidelines for the determination of the 
turnover in the hands of the Assessing Authority for the purpose of levy of 
tax? 
Dismissing the appeals, the Court 
HELD: 1.1. Sales tax is an indirect tax. It is leviable on transfer of goods. 
It is, however, well settled that while construing a taxing statute one has to 
look merely at what is clearly said. !Para 231186-H; 87-H) 
State of West Bengal v. Kesoram Industries Ltd, 12004110 SCC 201, 
relied on. 
Justice G. P. Singh: "Principles of Statutory Interpretation 8th Edn., 2001, 
referred to. 
MAHIMPATRAMPRIVATELTD. v. U.0.l. 
75 
1.2. A taxing statute indisputably is to be strictly construed. It is, A 
A 
however, also well settled that the machinery provisions for calculating the 
tax or the procedure for its calculation are to be construed by the ordinary 
rule of construction. Whereas a liability has been imposed on a dealer by the 
charging Section, it is well settled that the court would construe the statute 
in such a manner so as to make the machinery workable. 

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