PANDIT BANARSI DAS BHANOT vs THE STATE OF MADHYA PRADESH& OTHERS(and connected appeals)

The Supreme Court held that the Central Provinces and Berar Sales Tax Act, 1947, is ultra vires the powers of the Provincial Legislature to impose a tax on the supply of materials in works contracts, as the expression 'sales of goods' in Entry 48 of List II refers to sales as defined in the Indian Sale of Goods Act, 1930. The Court affirmed that there is no sale of materials in a building contract, thus invalidating the tax assessment. However, the delegation of power to the State Government under Section 6(2) to amend the exemption schedule was upheld as constitutional.