Brief case: Works contract may be split to impose tax

A weekly selection of key court orders

A works contract is divisible and state governments can levy sales tax on the goods going into the civil work. The contract can be divided into two parts, one for sale of goods and the other for supply of labour and services, and they can be dealt with separately, the Supreme Court (SC) held last week in the appeal case, Indian Hume Pipe vs State of Rajasthan. In this case, the company undertook extensive civil work at dams and canals, mainly to lay pipelines. It used its own material for the purpose. When it sought an exemption for the goods