STATE OF JHARKHAND vs VOLTAS LTD. EAST SINGHBHUM

The Supreme Court held that the imposition of sales tax on works contracts is governed by Article 366(29A)(b) of the Constitution, which allows for taxation on the transfer of property in goods involved in such contracts. The Court reiterated the principles established in Gannon Dunkerley and Co. & Ors. vs. State of Rajasthan, emphasizing that only the value of goods, excluding charges for labor and services, can be taxed. The Court ruled that the sales tax charged at 16% was improper, affirming the respondent's right to charge only 8% as per the relevant government circular.