M/S.NATHPA JHAKRI JT.VENTURE vs STATE OF H P

The Supreme Court upheld the validity of Section 12-A of the Himachal Pradesh General Sales Tax Act, 1968, and Rule 31-A of the Himachal Pradesh General Sales Tax Rules, affirming that these provisions allow for a deduction of up to 4% from payments to works contractors for tax on the transfer of property in goods. The Court clarified that the deductions pertain only to the valuable consideration for the transfer of goods, and not the total value of the works contract. The Court dismissed the appellant's challenge, confirming that the provisions do not exceed the legislative competence of the State.