STATE OF GUJARAT Vs BHARAT PEST CONTROL
Gujarat Value Added Tax Act, 2003 – Work Contract - Whether the materials used in a contract to provide pest control treatment would amount to a deemed sale within the meaning of Article 366 (29A)(b) of the Constitution of India so as to make the same exigible to tax under VAT
HELD - The salient features of the contract is to make services of pest control available to the consumer by use of chemicals to be procured and supplied by the contractor. Admittedly, in the course of the execution of the contract there is no trace of the goods / materials used for execution of the contract - goods which have by incorporation become part of immovable property are deemed as goods.
The definition of “tax on the sale or purchase of goods” includes a tax on the transfer or property in the goods as goods or which have lost its form as goods and have acquired some other form involved in the execution of a works contract
In view of the position of law enunciated in Larsen & Toubro Ltd and Kone Elevator the view taken by the High Court that there is no deemed sale of the goods used in the contract executed by the respondent-contractor, cannot be sustained – the High Court order is set aside and revenue appeal is allowed