Works Contract - The Legal Chamber

This Supreme Court judgment clarifies the levy of tax on goods involved in a works contract under Article 366(29-A)(b) of the Constitution. The Court held that tax is leviable on the transfer of property in goods, even if consumed, provided the transfer occurs upon their incorporation into the works. The taxable event is the deemed sale at the moment of incorporation, not the subsequent consumption or tangible presence in the final product. Facts Of The Case: The appellant, M/s. Aristo Printers Pvt. Ltd., was engaged in the business of printing lottery tickets on paper supplied by its clients, while it procured the ink and processing materials, including chemicals, itself. The Assessing Authority levied trade tax on the value of these materials under Section 3F of the Uttar Pradesh T...

The Supreme Court upheld the exclusive jurisdiction of the Madhya Pradesh Arbitration Tribunal over disputes arising from state works contracts, as per the MP Madhyastham Adhikaran Adhiniyam, 1983. It ruled that a private arbitration clause in a concession agreement cannot override this statutory mandate, rendering such arbitration non-est in law. Facts Of The Case: The dispute arose from a Concession Agreement dated 05.01.2012 between Umri Pooph Pratappur Tollways Pvt. Ltd. (Appellant) and the Madhya Pradesh Road Development Corporation (Respondent) for the development of a state highway on a BOT (Toll + Annuity) basis. Following alleged breaches and delays attributed to the Respondent, the Appellant first initiated proceedings in 2018 before the Madhya Pradesh Arbitration Tribunal, a s...

Tag: Works Contract

Supreme Court Rules: Ink and Chemicals Used in Printing are Taxable in Works Contracts

Clarifying Jurisdiction: Supreme Court Reaffirms Exclusive Power of MP Arbitration Tribunal for Public Works