Case Law (SC) – To sustain a levy of tax (on goods involved in the execution of the works contract) under Section 3F(1)(b) of the Uttar Pradesh Trade Tax Act, 1948, three conditions must be fulfilled: (i) there must be a works contract; (ii) the goods should have been involved in the execution of the works contract; and (iii) the property in those goods must be transferred to a third party either as goods or in some other form.

 Aristo Printers Pvt. Ltd v. Commissioner Of Trade Tax, Lucknow, U.P.[ 2025 INSC 1188] dated 07.10.2025.

Issue before Court is: -

Whether tax can be levied under Section 3F of the Uttar Pradesh Trade Tax Act, 1948, on the ink and processing material used by the appellant in undertaking the printing work?.

Decision: -

“70. In order to sustain a levy of tax under Section 3F(1)(b) of the Act, 1948, three conditions must be fulfilled: (i) there must be a works contract; (ii) the goods should have been involved in the execution of the works contract; and (iii) the property in those goods must be transferred to a third party either as goods or in some other form.

71. The appellant has admitted that the contract for printing lottery tickets is a works contract. Based on the judgments of this Court, it cannot be said otherwise as well. From the record, it is clear that the ink, chemical and other processing material were involved in the printing of the lottery tickets.

72. Further, there is a transfer of property in the ink and chemicals used in the printing of the lottery tickets. The works contract in this instance is for the printing of lottery tickets, and “the works” refers to the final, tangible printed ticket. The taxable event, or the “deemed sale”, occurs at the precise moment the ink is applied to the paper. This act constitutes “incorporation in the works”, as the ink and the chemicals (with which the ink is mixed) are involved in the execution of the work contract and become a part of the lottery ticket. In this process, there is a tangible transfer of the diluted ink, a composite good comprising both the ink and the processing chemicals.

73. Thus, in the facts of the present case all three conditions required to sustain a levy of tax under Section 3F(1)(b) of the Act, 1948, are fulfilled : (i) a works contract exists for printing of lottery tickets; (ii) ink and chemicals have been involved in the execution of the works contract; and (iii) the property in the ink and chemicals has been transferred in execution of the works contract. Consequently, the appellant is liable to pay tax under Section 3F(1)(b) of the Act, 1948 on the ink and processing material.”

 

 

 

Comments

Post a Comment

Popular posts from this blog

Case law (SC) -- SLP dismissed against order of High Court where notice u/s 148 was quashed stating that notice u/s 148 must comply with the Faceless Scheme regardless of the Assessee being a NRI/Indian Citizen.

ADIT (INT TAXN) 2 HYD & ANR. v. DEEPANJAN ROY[SLP (CIVIL) No. 33956/2025 dated 16.07.2025]  "1. Delay condoned. 2. Exemption Application is allowed. 3. Having heard the learned counsel appearing for the petitioners – Revenue and having gone through the materials on record, we find no good reason to interfere with  the impugned order passed by the High Court. 3. The Special Leave Petition is, accordingly, dismissed. 4. Pending applications, if any, shall also stand disposed of. "  
Read more

Case law (SC) - Once the Resolution Plan is approved by the NCLT, All the dues including the statutory dues owed to the Central Government, if not a part of the Resolution Plan, shall stand extinguished and no proceedings could be continued in respect of such dues for the period prior to the date on which the adjudicating authority grants its approval under Section 31 of the IB Code.

Vaibhav Goel & Anr. v. Deputy Commissioner of Income Tax & Anr. [2025 INSC 375] dated 20.03.2024 "8. In view o f the declaration of law made by this Court, all the dues including the statutory dues owed to the Central Government, if not a part of the Resolution Plan, shall stand extinguished and no proceedings could be continued in respect of such dues for the period prior to the date on which the adjudicating authority grants its approval under Section 31 of the IB Code. In this case, the income tax dues of the CD for the assessment years 2012-13 and 2013-14 were not part of the approved Resolution Plan. Therefore, in view of sub-section (1) of Section 31, as interpreted by this Court in the above decision, the dues of the first respondent owed by the CD for the assessment years 2012-13 and 2013-14 stand extinguished.  9. We may note here that the decision of this Court in the case of Ghanashyam Mishra and Sons Pvt. Ltd.[(2021) 9 SCC 657 ]  was specifically relied upo...
Read more

Case Law (SC) - Where an assessee is entitled to deduction u/s 80HHC as well as 80IA, the deductions have to be computed separately, but the total deduction shall be restricted to gross total income computed under section 80IA.

Shital Fibers Limited v. CIT [2025 INSC 743] dated 20.05.2025 Issue :- The extent of deduction allowable separately under Section 80-IA and Section 80-HHC and the extent of deduction allowable through each provision and overall deduction allowable by adding them up. Holding "Section 80-HHC provides for a deduction in respect of profits retained for export business. The provision is applicable to a company or a person engaged in business of export out of India of any goods or mercantile to which the Section applies. In computing the total income, the assessee is entitled to deduction to the extent of percentage of profits set out in Subsection (1B) of Section 80-HHC.  17. Section 80-IA deals with deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development etc. Sub-section (1) provides that when the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any busi...
Read more