NDLI: M/s. Larsen & Toubro Limited & Anr. Vs. State of Karnataka & Anr.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Kidnapping and Rape
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Constitution of India
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6 Referred Case 7
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Others
Headnote	Works contract - Concept and meaning of - Held: The term "works contract" in Art.366 (29-A)(b) takes within its fold all genre of works contract and is not restricted to one specie of contract to provide for labour and services alone - Nothing in Art.366(29-A)(b) limits the term "works contract" - Where a contract comprises of both a works contract and a transfer of immovable property, such contract does not denude it of its character as works contract - Constitution of India, 1950 - Art. 366(29-A)(b). Works contract - Levy of tax on goods deemed to have been sold in execution of a works contract - Three conditions to be fulfilled - Held: The conditions are: a) there must be a works contract, b) the goods should have been involved in the execution of a works contract and c) the property in those goods must be transferred to a third party either as goods or in some other form - In a building contract or any contract to do construction, the above three things are fully met. Works contract - Building contract - Held: Building contracts are species of the works contract - In the performance of a contract for construction of building, the goods (chattels) like cement, concrete, steel, bricks etc. are intended to be incorporated in the structure and even though they lost their identity as goods but this factor does not prevent them from being goods - The value of the goods which can constitute the measure for the levy of the tax has to be the value of the goods at the time of incorporation of the goods and works even though property passes as between the developer and the flat purchaser after incorporation of goods - If the developer has undertaken to build for the prospectivepurchaser for cash or deferred payment or a valuable consideration pursuant to a. contract then to that extent, the B contract is works contract and there is deemed SWorks contract - Composite contract - Held: A contract may involve both a contract of work and labour and a contract for sale - In such composite contract, the distinction between contract for sale of goods and contract for work (or service) is E virtually diminished - The dominant nature test has ncJ application) - Even if the dominant intention of the contract is not to transfer the property in goods and rather it is ' rendering of service or the ultimate transaction is transfer of · immovable property, then also it is open to the States to levy F sales tax on the materials used in such contract if such contract otherwise has elements of works contract - The enforceability test is a/so not determinative.Constitution of India, 1950- Art.366(29-A)(b) r/w Entry 54 G List II of Seventh Schedule - Taxing the sale of goods. element in a works contract - When permissible - Held: It is permissible even after incorporation of goods provided tax is directed to the value of goods and does not purport to tax the transfer of immovable property - Works contract. Constitution of India, 1950 - Art. 366(29-A)(b) rlw Entry 54 List II of Seventh Schedule - Expression "tax on the sale or purchase of goods" - Meaning of - Held: It 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 B contract - Works contract.Constitution of India, 1950 - Art. 366(29~A)(b) - Object of - Held: Is. to bring transactions where essential ingredients of 'sale' defined in the Sale '6f Goods Act, 1930 are absent C within the ambit of sale or purchase for the purposes of levy of sales tax - Transfer of movable property in a works contract is deemed to be sale even. though it may not be sale within the meaning of the Sale of Goods Act - Sale of Goods Act, 1930 - Works contract.Constitution of India, 1950- Art. 366(29-A)(b) - Transfer of property - Legal fiction - Held: Transfer of property in goods u/clause 29-A(b) of Art.366 is deemed to be a sale of the goods involved in the execution of a works contract by the p~rson making the transfer and the purchase of those goods , by the person to whom such transfer is made - Even in a single and indivisible works contract, by virtue of the legal fiction introduced by Art.366(29-A)(b), there is a deemed sale of goods which are involved in the execution of the works contract - Such a deemed sale has all the incidents of the sale of goods involved in the execution of a works contract where the contract is divisible into one for the sale of goods and the other for supply ·Of labour and services - Works contract. Maharashtra Value Added Tax Act, 2002 - s.2(24), G explanation (b)(ii) - Expression "sale" in - Amended definition of - Held: Is constitutionally valid. Maharashtra Value Added Tax Rules, 2005 - r.58(1A) - Valuation of goods - Mode of - State Government to bring clarity in r.58(1-A) - Subject to this, validity of r.58(1-A) A sustained.
Judge	Honble Mr. Justice R. M. Lodha
Neutral Citation	2013 INSC 653
Petitioner	M/s. Larsen & Toubro Limited & Anr.
Respondent	State Of Karnataka & Anr.
SCR	[2013] 17 S.C.R. 678
Judgement Date	2013-09-26
Case Number	8672

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