SC upholds levy of Sales tax on processing and supplying of photographs - reiterates power to levy tax retrospectively

Last updated: 14 February 2015

Court :
SC

Brief :
Hon’ble Supreme Court has re-affirmed the position laid down in Larsen Turbo Case followed by landmark judgment of Five Judge Constitution Bench of the Hon’ble Supreme Court in the case of Kone Elevator India Private Limited Vs. State of Andhra Pradesh [2014-TIOL-57-SC-CT-CB], regarding inapplicability of ‘Dominant Intention Test’ in case of Works contract.Consequent to the aforesaid decisions, Assessees or the Revenue should no longer be able to have recourse to the ‘Dominant Intention Test’ for determining the taxability of Works contract transactions. However, the question still prevails on applicability of ‘Dominant Intention Test’ for transactions which do not get covered under Article 366(29A) of the Constitution. Accordingly, if a transaction doesn’t qualify as a Works contract, it would not be open for vivisection, making it imperative for the Assessee to closely examine the transactions in order to determine their true nature.

Citation :
State of Karnataka Etc Vs. Pro LAB and Ors [2015-TIOL-08-SC-CT-LB]