@JUDGMENTTAG-ORDER
R. Gururajan, J.-The petitioner-M/s. Larsen and Toubro Limited is before us as against the order dated 30-11-2005 passed by the Karnataka
Appellate Tribunal in ST (Rect.) No. 14 of 2004, by raising the following questions of law:
(a) Whether the turnover of declared goods can be subjected to tax as per the scheme of Karnataka Sales Tax Act, 1957 by taking note of
applicable rate of Sixth Schedule read with Section 5-B of the Act as to the nature of contract than the description of goods incorporated into the
works?
(b) Whether the turnover of declared goods meant for incorporation in civil construction work can be construed as always results in transfer of
property in conglomerate than the individual description of goods i.e., iron and steel?
(c) Whether the turnover of declared goods incorporated in execution in contract to be construed as results in transfer in property on the basis of
terms and conditions of the contract as otherwise i.e., periodically on basis of its incorporation?
(d) Whether the Tribunal was right in not granting deduction of turnover of iron and steel purchased from registered dealers and transferred in the
execution of works contract in terms of Rule 6(4)(n) of Karnataka Sales Tax Rules from the total turnover?
2. Facts in brief are as follows.-
Petitioner is a company having registered office at Bombay. It has a construction division with its headquarters at Madras. ECC Division of the
petitioner has a Regional Office at Bangalore. Petitioner, among various disputed issue, was subjected to higher rate of tax as well as other levies
on the declared goods turnover of Rs. 5,55,87,829/- exclusively relating to the Information Technology Park Limited (ITPL), which meant for
Civil Construction work. In short, the said turnover of declared goods was not only subjected to tax at a higher rate than 4 per cent under Section
5(4) read with charging Section 5-B of he KST Act, but the eligible deduction for local tax suffered goods of Rs. 1,14,11,880/- was disallowed.
Primarily the stand of the department as a whole in general have been that the nature of iron and steel used in execution of works contract cannot
be construed as resulting in transfer of property in goods in the same form so as to come within the fold of Section 5(4) of the Karnataka Sales
Tax Act, 1957 read with Section 15 of the Central Sales Tax Act, 1956. Petitioner at all levels of proceedings has maintained consistent stand
about the turnover of iron and steel used execution of civil construction work cannot be taxed exceeding 4 per cent and other levies not imposable.
Petitioner in support of the above have produced a copy of the contract, invoices raised on the clients for the work done, certification of clients
approving for erection, photographs for work-in-progress, statement of turnover goodswise as well as specific written submission to the effect iron
and steel for the said ITPL Project since used in the same form. Petitioner secured LOI dated 31-8-1995 for the revised value of Rs. 328.14
crores from the said ITPL towards civil construction of building to be completed within 79 weeks. Work was commenced from October 1995 to
January 2000 covering the assessment period 1996-97 to 1999-2000. Petitioner filed periodical return/annual return in Form 4 including the said
ITPL GTO for Rs. 3672/- lakhs, TTO Rs. 1068.69 lakhs as well as discharged the tax liability of Rs. 80.71 lakhs. The said turnover of ITPL
includes declared goods turnover of Rs. 5,55,87,829/- liable to tax at 4 per cent as well as Rs. 1,14,11,880/- eligible for exemption since local tax
paid goods as supported documents. Petitioner provided all required documents, records, evidence, statement, etc. Despite the production of
documents, the turnover of declared goods were subjected to additional tax of Rs. 31,36,464/- due to higher rate of tax at 8 per cent; Rs.
1,56,824/- due to levy of cess at 5 per cent and Rs. 18,42,492/- towards TOT at 2.75 per cent. Petitioner thereafter was exempted from levy of
tax under Section 5-B of the KST Act in terms of the Notification dated 19-12-1996 issued under Section 8-A of the KST Act. Petitioner filed an
appeal before the First Appellate Authority and the Appellate Authority allowed the appeal. Aggrieved by the same, petitioner filed an appeal
before the Tribunal. Revenue filed a cross-appeal. The Tribunal by a common order disposed of the matter. Tribunal upheld the levy of tax at 8
per cent on declared goods as per the assessment order dated 27-2-1998. Petitioner aggrieved by the same, filed S.T.R.P. Nos. 13 and 14 of
2002. This Court directed the petitioner to file rectification application in terms of the order dated 14-6-2004 at Annexure-G. Thereafter,
petitioner filed a rectification application before the Tribunal, same was dismissed by the Tribunal. Petitioner aggrieved by the same has preferred
this revision petition raising the above questions of law.
3. Heard Sri Tirumalesh, learned Counsel for the petitioner. He would take as through the proceedings to contend that the Tribunal has committed
a serious error in rejecting the revision application in the case on hand. He would say that during this period, iron and steel was used by the
petitioner in the same form in the execution of the works contract. Learned Counsel says that they are liable to tax at 4 per cent.
4.Per contra, Smt. Sujatha, learned Government Advocate would support the order.
5. After hearing, we have carefully perused the material on record.
6. Petitioner, on an earlier occasion suffered an adverse order confirmed in appeal. Tribunal was moved. Ultimately, matter reached this Court by
way of revision petition. This Court heard the revision petition and thereafter disposed of the same in terms of the order dated 14-6-2004. In the
light of the argument, we have carefully perused the order of this Court. In para 6 of the order, this Court notices the contention of the learned
Counsel for the petitioner in that case to the effect that the facts stated by Tribunal were not relevant for the assessment year in question; and that
those facts may be relevant for the subsequent assessment years but not for the assessment year in question. The Court notices that if the Tribunal
has committed any error, a right accrues to the petitioner to file a rectification application. At this stage, learned Counsel for the petitioner in that
case withdrew the petition with liberty to approach the Tribunal for filing appropriate application for rectification of the order made by it.
Thereafter, this Court accepted the request and permitted the petitioner to file appropriate application before the Tribunal for rectification of the
mistake committed by it on facts. In terms of the order dated 14-6-2004, a rectification application was filed. That was considered and an order
has been passed. Tribunal notices that the petitioner filed a bunch of photographs and sought for rectification of the mistake committed in the order
of the Tribunal. Tribunal considered the matter in para 9 of its order. Tribunal states that there is a clear finding of the Tribunal on an earlier
occasion. Tribunal further says that it has discussed this matter in the earlier order in paragraphs 74 to 83. Tribunal notices that the facts so
mentioned in those paragraphs were not disputed. Tribunal further notices that even in a basement car parking what is incorporated was pillars,
slabs, beams and not iron and steel; and that it was fabricated by the process of joining, bending with barbed wires. After noticing, the Tribunal
was of the view that the rate of tax in terms of Section 5-B of the Act would be applicable. Tribunal notices that no substantial evidence was
produced except furnishing copies of photos in the case on hand. Tribunal says that mere production of photos does not conclusively prove that
the petitioner has carried on civil works contract and that the iron and steel does not get incorporated as iron and steel. Tribunal also notices the
judgment of this Court in S.T.R.P. Nos. 60 and 61 of 2002. Tribunal in the absence of acceptable evidence on facts has rightly, in our view,
chosen to reject the rectification application. Since this finding is based on facts, no question of law as such arises in the case on hand.
7. In the circumstances, petitioner having failed to prove entitlement of 4 per cent tax on facts, cannot complain that the Tribunal has committed an
error in terms of the impugned order. No grounds. Petition is rejected.