JUDGEMENT Dipak Misra, J. 1. Invoking the jurisdiction of this Court under Article 226 of the Constitution of India, the petitioners in this batch of writ petitions have challenged the constitutional validity of Section 41 of the Bihar Value Added Tax Act, 2005 (for brevity, the VAT Act) and Rule 29 of the Bihar Value Added Tax Rules, 2005 (for short, the VAT Rules). 2. For the sake of clarity and convenience, the factual matrix in CWJC No. 17373 of 2008 are uncurtained herein. The petitioner, M/s Tantia Constructions Limited, is a company incorporated under the Companies Act, 1956 and has its registered office at Kolkata and local place of business at Patna wherefrom it is operating contract work throughout the State of Bihar. The petitioner-company is engaged in construction works having a network of its business throughout the country. It is involved in road construction project, road bridge construction works, railway bridge constructions, etc. in the State of Bihar. It has obtained registration under the VAT Act and the Central Sales Tax Act, 1956 (hereinafter referred to as the CST Act) within Special Circle at Patna. 3. As set forth, tenders were invited by the East Central Railway for construction of Railway Over Bridge at Bailey Road, Patna, Construction & Foundation and Substructure of Railway Bridge across river Koshi at Nirmali and a minor second bridge across river Gandak. The petitioner-company participated in the tender and his offer was accepted by the East Central Railway and the works contract was assigned to the petitioner-company vide letter of intent no. ECR/CAO/Con/WT/389- 146-160 dated 29.7.2005, 30.8.2006 & 12.2.2007. The petitioner-company commenced the construction works at various sites under the projects and raised the bills from time to time against part of the execution of the contract under the terms and conditions of the contract. The East Central "Railway, after excluding the amount of the value of goods which were purchased by the petitioner-company, have deducted 4% on the gross value of the bills. It is put forth that the petitioner-company purchases various commodities locally in the State of Bihar on payment of Bihar VAT and, hence, it is not liable to pay any tax as the petitioner is entitled to input tax credit on the amount of tax paid on the purchase of inputs in the State of Bihar for use in the execution of the works contract. 4 It is averred that the VAT Act came into force with effect from 1.4.2005. The said Act provided for registration of dealers dealing in the items covered by the extent of eligibility under the Act. Section 3 of the VAT Act provides for charging of tax liability from the dealers including the works contractor and others. A reference has been made to Sections 4, 6, 7 & 16 to explain the scheme of the VAT Act. A reference has also been made to Chapter-VI of the VAT Act which provides for filing of return by the registered dealers under the Act; the assessment and re-assessment of the dealers for finalization of the actual tax liability under the Act. It is asserted that Section 41 of Chapter-VI of the VAT Act provides for advance recovery of tax by the Government department or agency from the bills raised by the dealers against execution of the works contract assigned to him by such Department as per the rates of tax liability prescribed under the VAT Act which has been published in the notification in the Official Gazette. The concerned Department of the Government or agency is required to deposit the amount of deduction from the bills with the Officer of the Commercial Taxes Circle who has jurisdiction in the matter and issue a certificate of such deduction of tax to the works contractor in the format prescribed under the Rules. It is set forth that under Section 41(1) of the VAT Act, the State Government has issued a notification being S.O. No. 50 dated 22.6.2005 wherein it has been provided that deduction of tax amount is to be made by the Government Department and agencies from out of the gross amount of the bills raised by the works contractor @ 4%. The respondent- East Central Railway, after deduction of the tax towards value added tax @ 4% from the gross bill amount raised by the petitioner-company, deposited the said tax with the respondent-Deputy Commissioner of Commercial Taxes, Patliputra Circle, Patna. The certificate contemplated under the third proviso to Section 41 of the VAT Act does not authorise the said authority to bear the components which are referred to in Section 29 by way of pre-determination and in the absence of any norms or guidelines, the said provision is unreasonable, arbitrary and invites the frown of Article 14 of the Constitution of India. A certificate of tax deducted at source (TDS) in Form C-ll was issued by the respondents mentioning therein the details of the tax deduction made by the respondents to the respective Commercial Taxes Circles. It is urged that the respondents have been illegally and arbitrarily deducting the advance tax out of the bills raised by the petitioner-company against the execution of the works contract at the rate of 4% from the gross bill amount. 5. Be it noted, counter affidavits have been filed in some cases and have been adopted in other cases. The basic stand in the counter affidavits is that the provision as couched in the present incarnation does not suffer from lack of legislative competence and there is a mechanism provided at the time of deduction of taxes from the bills and immense guidelines have been given in the provision itself and, therefore, it cannot be said that it suffers from the wrath of Article 14 of the Constitution of India. It is also averred that the machinery provision takes care of it that no advance tax is. paid on the items on which the State Legislature is not entitled in law to impose. 6. Dr. Devi Pal, learned Senior Counsel for the petitioners, has raised the following contentions: (a) That the determination as conceived under Section 41 of the Act cannot be made when the principal is making the payment of the bill with the principal contractor which is made at the pre-assessment stage in the absence of any mechanism or device for such process of determination and without proper determination by way of adjudication, the value of the transfer of property in goods involved in the execution of the works contract cannot be made. In fact, the principal is obliged to deduct sales tax at the rate of 4% on the entire bill or invoice and many of the items which do not form part of the components of the consideration for the goods which are transferred in the execution of the works contract and on which the State Legislature is not competent to impose any tax are also included in the said composite price. No authority can impose tax without the sanction of law and Section 41 of the VAT Act stipulates collection of tax by way of advance tax which cannot be imposed by the State Legislature. No authority can impose tax without the sanction of law and Section 41 of the VAT Act stipulates collection of tax by way of advance tax which cannot be imposed by the State Legislature. (b) In the absence of any provision for determination, the deduction at the stage of running bills which is at the preassessment stage is impermissible and that makes the provision invalid in view of the decision rendered in Larsen and Toubro Ltd. & Ors. V/s. State of Bihar & Ors., (2000)117 STC 41 (Pat.) [:1999(3) PLJR 960]. (c) In the absence of any machinery provision for determination, there is no guidance and, hence, the provision invites the wrath of Article 14 of the Constitution of India. (d) By imposition, in the absence of a machinery provision, the tax is imposed on goods on inter-State sale which is beyond the powers of the State Legislature for the State Legislature cannot make any law for levying sales tax on inter-State sales, outside sales or sales in the course of import. To buttress the said submission, Mr. Pal, learned Senior Counsel, has placed reliance on Steel Authority of India Ltd. V/s. State of Orissa, (2000)118 STC 297 (SC), M/s Bhawani Cotton Mills Ltd. V/s. State of Punjab & Anr., AIR 1967 SC 1616 , Nathpa Jhakri Jt. Venture V/s. State of Himachal Pradesh & Ors., (2000)118 STC 306 (SC), Keshob Plants V/s. B.S.N.L., 22 VST 422 (P&H) and Larsen and Toubro Ltd. & Ors. V/s. State of Andhra Pradesh, 148 STC 83 (AP). (e) The third proviso to Section 41 of the VAT Act provides that when a certificate from the Deputy Commissioner is issued to the effect that the payment or any part thereof relates to such transfer of property in goods on which he has no liability to pay tax, the liability to pay tax has to be discharged. The said certificate cannot be regarded as a machinery provision inasmuch as at the time of issue of such certificate, the Deputy Commissioner has no material on which he can decide as regards the portion of the contract for the transfer of goods in the course of inter-State trade or commerce or in the course of import of goods outside the country. There are no norms or guidelines provided as to how the said authority would issue such a certificate and the same is an ad hoc arrangement which is arbitrary. To bolster the said submission, learned Senior Counsel has placed reliance on Larsen and Toubro Ltd. & Ors. V/s. State of Jharkhand & Ors., (2005)140 STC 134 (SC). (f) The State Legislature has no competence or authority to impose any sales tax or to deduct from the gross amount of the bill or invoice and Rule 29 of the VAT Rules which provides the same has to be declared ultra vires as it travels - beyond the constitutional provisions of the State Legislature inasmuch as imposition or deduction of tax on that portion of the gross amount of the bill or invoice which does not represent sale within the State of Bihar under Entry 54 of List-ll of the Seventh Schedule. (g) As per Section 16 of the VAT Act, input tax credit is claimed by a registered dealer, subject to such conditions and restrictions as may be prescribed, on sales of goods under certain circumstances. When a contractor purchases the goods from the market, he pays the input tax in Bihar and when he transfers the goods in the course of execution of the works contract to the principal which is to be used in the execution of a works contract, he is entitled to deduct from the input tax which he has paid for the purchase of the articles. He is liable to pay tax in terms of Section 13(2) of the VAT Act but there is no machinery or mechanism for determining the amount which the principal is to pay when the goods have been purchased by the contractor on payment of input tax and transfer it in the execution of a works contract and, hence, the provision becomes non-workable and is therefore, violative of Article 14 of the Constitution of India. That apart, when the contractor purchases the goods within the State and pays tax on it, the input tax is to be set off against the sale price of the products which he ultimately sells in the market or to the consumers. If a contractor purchases certain materials of Rs. 100/- and pays purchase tax at 4%, the cost of the input is Rs. 104/-. If a contractor purchases certain materials of Rs. 100/- and pays purchase tax at 4%, the cost of the input is Rs. 104/-. When he sells the article in the market or to the consumer, he charges Rs. 110/-. Therefore, the tax under the VAT Act will be on the addition of the value of Rs. 6/- and on that Rs. 6/-, 4% can be levied, i.e., 24 paise. Regard being had to the aforesaid provision, if the tax is deducted at 4% on the full price, that does not constitute the liability to pay under the VAT Act and, hence, tax is deducted contrary to the provisions of the statute. (h) When a bill or invoice on the basis of which the tax is deducted at 4% involves multiplicity of transaction one of which may attract tax on the price of the materials which are transferred in the execution of a works contract and the other transactions do not fall within the power of the State Legislature to impose any tax thereon, the deduction at source without any determination or adjudication at that stage is beyond the legislative competence as tax is imposed on the composite transaction. 7. Mr. P.K. Shahi, learned Advocate General and Mr. Lalit Kishore, learned Additional Advocate General-Ill, resisting the aforesaid submissions, have advanced the following proponements: (i) The provision that was declared ultra vires in Larson & Toubro (supra) by this Court is totally different from the present provision contained in Section 41 of the VAT Act and, hence, the said decision is distinguishable. (ii) The provision is self-declaratory in nature and also does not impose tax on goods which are not excisable to tax. (iii) The terms subject to the provisions of Section 6 used in Section 41 of the VAT Act is an exclusionary provision whereby the inter-State sale does not come within the net of tax and no advance tax is deducted on the said amount and, therefore, the question of legislative competence does not arise. (iv) The decision rendered in Steel Authority of India Ltd. (supra) is distinguishable as the provision that was interpreted in the said decision had a different contour and character and did not provide for any exclusion. (iv) The decision rendered in Steel Authority of India Ltd. (supra) is distinguishable as the provision that was interpreted in the said decision had a different contour and character and did not provide for any exclusion. (v) Section 41 is a self-contained provision and gets supplemented by Rule 29 of the VAT Rules as a result of which adequate guidance is provided which nullifies the submission that tax is imposed without legislative competence. (vi) There cannot be a full-fledged assessment at the stage of deduction of tax at source and, therefore, the role ascribed to the Deputy Commissioner serves as a machinery provision to protect the interest of the assessee as the said authority has been clothed with the power to issue a certificate keeping in view the prescriptions in Section 41 and Rule 29 of the Act and it is open to the contractor to show materials that certain items are not excisable to tax. Thus, the decision rendered in Larson & Toubro Limited (supra) by the Jharkhand High Court which has persuasive value, not being a binding precedent, should not be followed. (vii) The distinction between the earlier provision which commenced with the non obstante clause and the present one has to be appreciated in proper perspective and on being appositely appreciated, it would be quite clear that the provision does not lack legislative competence. 8. To appreciate the controversy in total completeness, it is requisite to see the previous provision and the verdicts thereon. Section 25A of the Bihar Finance Act, 1981, which dealt with advance recovery of tax, reads as follows: "25.A. Advance recovery of tax. 8. To appreciate the controversy in total completeness, it is requisite to see the previous provision and the verdicts thereon. Section 25A of the Bihar Finance Act, 1981, which dealt with advance recovery of tax, reads as follows: "25.A. Advance recovery of tax. (1) Notwithstanding anything contained in Section 26, every person responsible for making any payment of sale price or any amount purporting to be the full or part payment of the sale price or any payment in discharge of any liability on account of valuable consideration payable in respect of transfer of property in goods, whether as goods or in some other form, involved in the execution of a works contract shall be lawfully competent to deduct an amount at the rate or rates specified by the State Government in a notification published in the Official Gazette, purporting to be a part or full amount of tax payable on the scale of such goods from every bill or invoice raised by the works contractor as payable by the person: Provided that no such payment or discharge of any such bill or invoice raised by a works contractor shall be made without deduction referred to in sub-section (1): Provided further that the rate or rates to be specified by the State Government under sub-section (1) shall not exceed four per centum. Explanation.Person in this section includes all officers and authorities of the Central or State Government or of a company, corporation, board, authority, co-operative society, undertaking or any other body constituted or formed under any Act and of any firm or association of persons and organization. (2) The amount deducted under sub-section (1) shall be adjusted against the amount of tax finally assessed or determined as being payable by the concerned works contractor and any amount deducted in excess of the tax so assessed or determined shall be refunded in accordance with the provisions of the Act. (3) (a) The deduction referred to in sub-section (1) shall be made in the manner prescribed. (b) The person making the deduction shall deposit the amount deducted into the Government treasury in the manner prescribed. (4) The person making the deduction shall issue a deduction certificate in the prescribed manner and form containing all particulars required to be mentioned therein to the works contractor or person from whose bill or invoice such deduction has been made. (b) The person making the deduction shall deposit the amount deducted into the Government treasury in the manner prescribed. (4) The person making the deduction shall issue a deduction certificate in the prescribed manner and form containing all particulars required to be mentioned therein to the works contractor or person from whose bill or invoice such deduction has been made. (5) If any person contravenes any or all of the provisions of sub-sections (1), (2), (3) and (4), the prescribed authority shall after giving a reasonable opportunity of being heard, by order in writing direct, that such person shall pay by way of penalty, a sum not exceeding twice the amount of tax deducted or deductible under sub-section (1). (6) The provisions of Section 27 for recovery of any amount of tax due from a dealer shall, mutatis mutandis, apply for recovery of any amount of tax deducted and or any penalty imposed under this section but not deposited into Government treasury. (7) Notwithstanding any judgment, decree or order of any court, Tribunal or authority any deduction made purporting to be part or full amount of tax payable on the sale of goods from any bill or invoice raised by the works contractor by any person on or after 1st April, 1984 shall be adjusted against the amount of tax finally assessed or determined as being payable by the concerned works contractor and any amount deducted in excess to amount so assessed or determined shall be refunded in accordance with the provisions of the Act." 9. The said provision came to be challenged in Larsen and Toubro Ltd. & Ors. (supra). The Division Bench referred to Article 286 of the Constitution of India, the decisions rendered in Builders Association of India (supra), Jamshedpur Contractors Association V/s. State of Bihar, [1989] 75 STC 132 (Pat.) [: 1990 (1) PLJR 407], Hindustan Derr-Oliver Ltd. V/s. Union of India, [1989] 75 STC 211 [: 1990 (1) PLJR 395], Shewaram Hirwani V/s. State of Bihar, [1990] 77 STC 55(Pat.) [:1990 (1) PLJR 411], Construction & Construction V/s. Union of India, [1990] 77 STC 405(Pat.) [: 1990 (1) PLJR 413] and Geeta Prasad Singh and Co. V/s. State, [1986] 63 STC 337(Pat.) [: 1986 PLJR 451] and came to hold that the said decisions were rendered on the interpretation of Section 25A of the Bihar Finance Act as it originally stood before the section was amended in extenso. Thereafter, the Bench referred to the amended provision and reproduced the provision. Their Lordships then referred to others decisions of the Apex Court in Brajendra Mishra (supra) and KEC International Ltd. V/s. State of Karnataka,[1997] 105 STC 192(Kar.) and held as follows: "39 Besides, a practical difficulty which may arise in giving effect to the provisions of Section 25A in the aforesaid manner would be that in the absence of any mechanism or laid down guidelines in the section, the person required to make deduction may not be able to determine the amount. I am conscious of the fact that the question as to whether a particular transaction falls within the realm of inter-State trade or commerce or outside State sale or a sale in course of import or export within the meaning of Sections 3, 4 and 5 of the Central Sales Tax Act is more often than not a ticklish question which the courts find difficult to decide even where the facts have been determined in regular assessment proceedings. It may be more difficult to decide such a question at an early stage before assessment proceeding has not even commenced. Nonetheless, allowing, nay, mandating deductions from payments even in respect of transfer of property in such goods which takes place in course of inter-State trade or commerce or outside the State or so on in violation of the constitutional provisions and keeping the proceeds for an indefinite period, up to four and half years or so cannot be approved. 40. In my opinion, in order to sustain such a provision some mechanism has to be provided in the statute for excluding such transactions on the basis of prima facie adjudication subject to the final determination of the rights at the stage of assessment of the tax liability. 40. In my opinion, in order to sustain such a provision some mechanism has to be provided in the statute for excluding such transactions on the basis of prima facie adjudication subject to the final determination of the rights at the stage of assessment of the tax liability. While the result of the adjudication in a regular assessment proceeding can be challenged by way of appeal/revision or reference, as provided under the Finance Act, summary adjudication made under Section 25A may be made final (subject, of course, to the writ jurisdiction of the High Court under Articles 226/227 of the Constitution.)" Thereafter, the Bench noted the sub-missions of the learned Advocate General in State of Kerala V/s. Builders Association of India [1997] 104 STC 134(SC)] and held thus: "42. It has been pointed out that in terms of Notification S.O. No. 214 dated June 19, 1993 (supra) only in cases covered by clause 2(a) where earthwork accounts for more than 33 per cent of the total value of the contract and is so mentioned in the estimates, that the deduction is to be made at 2 per cent but here also only the amount in excess of 33 per cent and not the whole of the amount of earthwork is excluded. In all other types of civil contract, described in sub-clause (b), deduction is to be made at the uniform rate of 2 per cent. In other cases not coming under any of the sub-clauses of clause 2, the deduction is to be made at 4 per cent. In Gannon Dunkerleys case [1993]88 STC 204, the Supreme Court has observed that while it is permissible for the State to prescribe formula on the basis of fixed percentage of the value of the contract as expenses towards labour and services and the same may only be deductible from the value of the works contract, it has to be ascertained that the amount deductible under such formula "does not differ appreciably from the expenses on labour and services that would be incurred in normal circumstances in th.at particular type of works contract. 43. Another aspect highlighted on behalf of the petitioner is that under Section 16 of the Bihar Finance Act, a dealer is required to file regular quarterly return and/or a monthly statement, and he is also required to deposit tax as per the return. 43. Another aspect highlighted on behalf of the petitioner is that under Section 16 of the Bihar Finance Act, a dealer is required to file regular quarterly return and/or a monthly statement, and he is also required to deposit tax as per the return. In the case of contractor-dealer, thus, while filing his return in respect of his liability for supply of materials in the execution of works contract, he is required to deposit tax as per the return; for the same works contract, the contractee while making payment to the contractor-dealer would also deduct tax under Section 25A. The amount so deducted under Section 25A by the contractee can be adjusted only after completion of the assessment which may take several years. Thus, during the intervening period, the contractor would suffer double taxation as on the basis of the same transaction he has already paid tax at the time of submission of the return and he is also made to part with the tax at the time of payment under section 25-A. No machinery has been provided in the Act to take into account the possible loss of the contractor in this manner. 44. It is unfortunate that although the mistakes have been pointed out and the provisions declared ultra vires, the amended provisions suffer from more or less the same mistakes and defects. The State has power to impose tax to augment its revenue within its permissible field and make provisions for its recovery; but at the same time development of the economy has also to be taken into account. If a taxing statute contains provisions implementation of which is likely to obstruct the economic growth, that may not be in the interest of the State itself. 45. To conclude, the provisions of Section 25A of the Bihar Finance Act to the extent they relate to transfer of property in goods taking place in course of inter-State trade or commerce or a sale outside the State or in the course of import within the ambit of Sections 3, 4 and 5 of the Central Sales Tax Act, or the "declared goods" within the meaning of Sections 14 and 15 of the said Act, must be held to be ultra vires Entry 54 of the State List read with Entry 92A of the Union List and Article 286 of the Constitution. Further, to the extent they provide for deduction from payment made on account of labour charges and other services towards sales tax, the provisions must be held to be ultra vires Entry 54 read with Article 366(29A)(b) of the Constitution." 10. At this juncture, it is worth noting that the said provision commenced with Notwithstanding anything contained in Section 26. Thus, it had a non obstante clause. Section 41 commences with Subject to Section 6. In this backdrop, to appreciate both the provisions, a distinction between the non obstante clause and subject to has to be drawn. 11. In A.V. Fernandez V/s. The State of Kerala, AIR 1957 SC 657 (V 44 C 99 Oct.), it has been held as follows: "36. What then is the effect of this non obstante provision? This Court in Aswani Kumar Ghosh V/s. Arabinda Bose, 1953 SCR 1 at pp. 21 and 22 ( AIR 1952 SC 369 at p.376) (E) made the following observations in connection with the non obstante clause: "It should first be ascertained what the enacting part of the section provides on a fair construction of the words used according to their natural and ordinary meaning, and the non obstante clause is to be understood as operating to set aside as no longer valid anything contained in relevant existing laws which is inconsistent with the new enactment." The same ratio applies to the construction of the non obstante provision contained in S. 26 of the Act with reference to all the other provisions of the Act that preceded the same." 12. In H.H. Maharajadhiraja Madhav Rao Jivaji Rao Scindia Bahadur and Others etc. V/s. Union of India, AIR 1971 SC 530 , their Lordships have held as under: "374. The non obstante clause must be allowed to operate with full vigour in its own field. In Dominion of India V/s. Shrinbai A. Irani (1955) 1 SCR 206 = ( AIR 1954 SC 596 ) Section 3 of Ordinance No. 19 of 1946 contained a non obstante clause with the words: "notwithstanding the expiration of the Defence of India Act, 1939, and the rules made thereunder, all requisitioned lands shall continue to be subject to requisition until the expiry of this Ordinance and the appropriate Government may use or deal with any requisitioned land in such manner as may appear to it to be expedient". The non obstante clause was invoked in support of the submission that only those orders which would have ceased to be operative and come to an end on the expiration of the Defence of India Act and the Rules were the orders which were intended to be continued under Section 3 of the Ordinance. This Court held that although ordinarily there should be a close approximation between the non obstante clause and the operative part of the section, the non obstante clause need not necessarily and always be co-extensive with the operative part, so as to have the effect of cutting down the clear terms of an enactment. The non obstante clause was held not to cut down the construction and restrict the scope of the operation of the enactment, but was to be understood to have been incorporated in the enactment by way of abundant caution and not by way of limiting the ambit and scope of the operative part of the enactment. The result was that all immoveable properties which when the Defence of lndia Act expired were subject to any requisition effected under the Defence of India Act and Rules thereunder were to continue to be subject to requisition until the expiry of the Ordinance". 13. In V. C. Shukla V/s. State through C.B.I., AIR 1980 SC 962 , it has been held thus: 19. It was then contended by the learned counsel for the appellant that the non obstante clause should be interpreted according to the salutary principles laid down by this Court. In support of his submission, he relied on a decision of this Court in the case of Aswini Kumar Ghosh V/s. Arabinda Bose, 1953 SCR 1 , where Sastri, C.J. observed as follows: "It should first be ascertained what the enacting part of the section provides on a fair construction of the words used according to their natural and ordinary meaning, and the non obstante clause is to be understood as operating to set aside as no longer valid anything contained in relevant existing laws which is inconsistent with the new enactment. The true scope of the enacting clause must, as we have observed, be determined on a fair reading of the words used in their natural and ordinary meaning." Similar observations were made by Mukherjee, J.: "In my opinion, the section on its negative side eliminates so far as the Supreme Court Advocates are concerned, all disabling provisions existing under any law in regard to persons who are not enrolled as Advocates of any particular High Court. On the positive side, the section confers on Supreme Court Advocates the statutory privilege of practicing as of right, in any High Court in India, no matter whether he is enrolled as an Advocate of that court or not." Das, J. as he then was, observed as follows: "In short, there is no escape from the conclusion that the ambit, scope and effect of the non obstante clause are to supersede the Indian Bar Councils Act and any other Act only in so far as they regulate the conditions referred to therein." 20. The observations of Das, J. clearly show that the effect of non obstante clause was to supersede the Indian Bar Councils Act and any other Act in so far as they regulate the conditions referred to therein. If we apply this test to the present case then it is manifest that the non obstante clause would have the effect of overriding and excluding the provisions of the Code. Applying the test laid down by Sastri, C.J., we find that the position may be summed up as follows: (1) We should exclude the statute concerned from consideration; in the instant case The Code; (2) We, should construe the words used according to their natural and ordinary meaning instead of referring to the statute which is sought to be excluded. 14. In State of Bihar & Others V/s. Bihar M.S.E.S.K.K. Mahasangh & Others., AIR 2005 SC 1605 [: 2005 (1) PLJR (SC)464], the Apex Court has expressed the view as under: "45. A non obstante clause is generally appended to a section with a view to give the enacting part of the section, in case of conflict, an overriding effect over the provision in the same or other Act mentioned in the non obstante clause. A non obstante clause is generally appended to a section with a view to give the enacting part of the section, in case of conflict, an overriding effect over the provision in the same or other Act mentioned in the non obstante clause. It is equivalent to saying that in spite of the provisions or Act mentioned in the non obstante clause, the provision following it will have its full operation or the provisions embraced in the non obstante clause will not be an impediment for the operation of the enactment or the provision in which the non obstante clause occurs. [See Principles of Statutory Interpretation, 9th Edition by Justice G.P. Singh, Chapter-V, Synopsis-IV at pages 318 & 319] 47. Normally the use of phrase by the Legislature in a statutory provision like notwithstanding anything to the contrary contained in this Act is equivalent to saying that the Act shall be no impediment to the measure [See Law Lexicon words notwithstanding anything in this Act to the contrary]. Use of such expression is another way of saying that the provision in which the non-obstante clause occurs usually would prevail over other provisions in the Act. Thus, non obstante clauses are not always to be regarded as repealing clauses nor as clauses which expressly or completely supersede any other pro- vision of the law, but merely as clauses which remove all obstructions which might arise out of the provisions of any other law in the way of the operation of the principle enacting provision to which the non obstante clause is attached. [See Bipathumma & Ors. V/s. Mariam Bibi; 1966 (1) Mysore Law Journal page 162 and at page 165]" 15. The term subject to came to be nterpreted by the Apex Court in State of Kerala V/s. M.K. Kunhikannan Nambiar Manjeri, Manikoth, Naduvil (Dead) & Others AIR 1996 SC 906 wherein it has been held thus: "7. In Halsburys Laws of England, 4th Edition, (Re-issue) Volume 1(1) in paragraph 26, page 31, it is stated, thus:- "If an act or decision, or an order or other instrument is invalid, it should, in principle, be null and void for all purposes; and it has been said that there are no degrees of nullity. In Halsburys Laws of England, 4th Edition, (Re-issue) Volume 1(1) in paragraph 26, page 31, it is stated, thus:- "If an act or decision, or an order or other instrument is invalid, it should, in principle, be null and void for all purposes; and it has been said that there are no degrees of nullity. Even though such an act is wrong and lacking in jurisdiction, however, it subsists and remains fully effective unless and until it is set aside by a court of competent jurisdiction. Until its validity is challenged, its legality is preserved." In the Judicial Review of Administrative Action, De Smith, Woolf and Jowell, 1995 edition, at pages 259-260 the law is stated, thus: "The erosion of the distinction between jurisdictional errors and non-jurisdictional errors has, as we have seen, correspondingly eroded the distinction between void and voidable decisions. The courts have become increasingly impatient with the distinction, to the extent that the situation today can be summarised as follows: (1) All official decisions are presumed to be valid until set aside or otherwise held to be invalid by a court of competent Jurisdiction." Similarly, Wade and Forsyth in Administrative Law, Seventh Edition-1994, have stated the law thus at pages 341-342: "...every unlawful administrative act, however invalid, is merely voidable. But this is no more than the truism that in most situations the only way to resist unlawful action is by recourse to the law. In a well-known passage Lord Racliffe said: An order, even if not made in good faith, is still an act capable of legal consequences. It bears no brand of invalidity upon its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity and to get it quashed or otherwise upset, if will remain as effective for its ostensible purpose as the most impeccable of orders. This must be equally true even where the brand of invalidity is plainly visible: for there also the order can effectively be resisted in law only by obtaining the decision of the court. This must be equally true even where the brand of invalidity is plainly visible: for there also the order can effectively be resisted in law only by obtaining the decision of the court. The necessity of recourse to the court has been pointed out repeatedly in the House of Lords and Privy Council without distinction between patent and latent defects." The above statement of the law supports our view that the order of the Board dated 28.6.1977, declining to implead respondents No. 3 and 4 (which stood confirmed in Revision) concludes the matter against respondents Nos. 3 and 4." 16. In M.V. Shankar Bhat & Anr. V/s. Claude Pinto (D.) by L.Rs. and Others, AIR 2004 SC 636 , the view expressed is as follows: "31. When an agreement is entered into subject to ratification by others, a concluded contract is not arrived at. Whenever ratification by some other persons, who are not parties to the agreement is required, such a clause must be held to be a condition precedent for coming into force of a concluded contract. 32. The word subject to has been defined in Blacks Law Dictionary, Fifth Edition, at page 1278, inter alia, as "subservient, inferior, obedient to; governed or affected by; provided that; provided; answerable for". In Collins English the words subject to has been stated to mean as ; "under the condition that: we accept, subject to her agreement". 33. The said agreement for sale, therefore, was not enforceable in a Court of law." 17. In Bar Council of India V/s. High Court of Kerala, AIR 2004 SC 2227 , it has been held as under: "31. In Ashok Leyland Ltd. V/s. State of Tamil Nadu & Anr. [ 2004 (1) SCALE 224 ] this Court noticed: "Subject to" is an expression whereby limitation is expressed. The order is conclusive for all purposes. 32. This Court further noticed the dictionary meaning of "subject to" stating: "Furthermore, the expression subject to must be given effect to. In Blacks Law Dictionary, Fifth Edition at page 1278 the expression "Subject to" has been defined as under: "Liable, subordinate, subservient, inferior, obedient to; governed or affected by; provided that; provided, answerable for, Homan V/s. Employers Reinsurance Corp., 345 Mo. 650, 136 S.W. 2d 289, 302." 33. In Blacks Law Dictionary, Fifth Edition at page 1278 the expression "Subject to" has been defined as under: "Liable, subordinate, subservient, inferior, obedient to; governed or affected by; provided that; provided, answerable for, Homan V/s. Employers Reinsurance Corp., 345 Mo. 650, 136 S.W. 2d 289, 302." 33. A Constitution Bench of this Court in Supreme Court Bar Association (supra) no doubt overruled its earlier decision in Vinay Chandra Mishra, Re (1995) 2 SCC 584 so as to hold that this Court in exercise of its jurisdiction under Article 142 of the Constitution of India is only empowered to proceed suo motu against an advocate for his misconduct and send for the records and pass an appropriate orders against the advocate concerned. 34. But it is one thing to say that the Court can take suo motu cognizance of professional or other misconduct and direct the Bar Council of India to proceed against the advocate but it is another thing to say that it may not allow an advocate to practice in his Court unless he purges himself of contempt." 18. In S.N. Chandrashekar and Another V/s. State of Karnataka and Others, (2006) 3 SCC 208 , it has been stated as follows: 29. The words "subject to" used in Section 14 are of some significance. The said words must be given full effect to. The meaning of the said words had been noticed in Ashok Leyland Ltd. V/s. State of T.N., (2004) 3 SCC 1 in the following terms: (SCC p. 38, paras 92-93) "92. Furthermore, the expression subject to must be given effect to. 93. In Blacks Law Dictionary, 5th Edn., at p.1278, the expression subject to has been defined as under: "Liable, subordinate, subservient, inferior, obedient to; governed or affected by; provided that; provided; answerable for. Homan V/s. Employers Reinsurance Corpn., 345 Mo. 650, 136 S.W. 2d 289, 302." 19. The present provision of Section 41 of the VAT Act, which is under assail reads as follows: "41. Advance recovery of tax from Works Contractors. (1) Subject to the provisions of Section 6. Homan V/s. Employers Reinsurance Corpn., 345 Mo. 650, 136 S.W. 2d 289, 302." 19. The present provision of Section 41 of the VAT Act, which is under assail reads as follows: "41. Advance recovery of tax from Works Contractors. (1) Subject to the provisions of Section 6. every person, responsible for making any payment in discharge of any liability on account of valuable consideration payable in respect of transfer of property in goods (whether as goods or in some other form) vested in the execution of a works contract shall be lawfully competent to deduct an amount at the rate or rates, not exceeding four per cent, to be specified by the State Government, in a notification published in the Official Gazette, purporting to be a part or full amount of tax payable on the sale of such goods from every bill or invoice raised by the works contractor as payable by the person and no such payment or discharge of any such bill or invoice raised by a works contractor shall be made without deduction as aforesaid. Explanation.For the purposes of this section, the "person" in this section shall include all officers and authorities of the Central or the State Government or of a company, corporation, board, authority, co-operative societies, undertaking or any other body constituted or formed under any Act and of any firm or association of persons and organisation: Provided that, the State Government may prescribe the conditions subject to which no such deductions shall be made. (2) No such payment or discharge of any bill or invoice raised in respect of transfer of property in goods (whether as goods or in some other form) by a works contractor shall be made without the deduction referred to in sub-section (1): Provided that no deduction under sub-section (1) shall be made where the payment is made as advance prior to the commencement of the execution of such works contract until it forms part of the sale price payable for transfer of property in goods (whether as goods or in some other form): Provided further that no deduction under sub-section (1) shall be made from the payment or any part thereof, where: (a) the payment or any part thereof does not relate to any transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract: (b) the dealer produces a certificate issued by the Deputy Commissioner. Commercial Taxes or the Assistant Commissioner. Commercial Taxes or the Commercial Taxes Officer. In-charge of the concerned Circle to the effect that the payment or any part thereof relates to such transfer of property in goods (whether as goods or in some other form) on which he has no further liability to pay tax in terms of the provisions of Section 15 of the Central Sales Tax Act. 1956 (74 of 1956): (c) the dealer produces a certificate issued by the Deputy Commissioner. Commercial Taxes or the Assistant Commissioner. Commercial Taxes or the Commercial Taxes Officer. In-charge of the concerned Circle to the effect that the payment or any part thereof relates to such transfer of property in goods (whether as goods or in some other form) on which he has no liability to pay tax in terms of the provisions of Section 6. (3) The amount deducted under sub-section (1) shall be adjusted against the amount of tax finally assessed or determined as being payable by the concerned works contractor and any amount deducted in excess of the tax so assessed or determined shall be refunded in accordance with provisions of this Act, (4) The deduction referred to in sub-section (1) shall be made in the manner prescribed. (5) The person making the deduction shall issue a certificate, in the form and manner prescribed, containing such particulars as may be required to be mentioned therein, to the works contractor or person from whose bill or invoice such deduction has been made and such certificate shall be deemed to be a valid discharge of liability in terms of provisions of sub-section (9) of Section 24 to the extent of amount of deduction made under sub-section (1). (6) If any person contravenes any or all of the provisions of sub-sections (1), (2) and (5), the prescribed authority shall, after giving a reasonable opportunity of being heard, by order in writing direct that such person shall pay by way of penalty, a sum not exceeding twice the amount of tax deductible or deducted and not deposited in the Government Treasury. (7) The provisions of Sections 39 and 47 shall, mutatis mutandis, apply for recovery of any amount of tax deducted but not deposited into the Government Treasury or any penalty imposed under this section." 20. Rule 29 of the VAT Rules reads s follows: "29. Deduction of tax at source from the bills of Work Contractors. (1) The deduction referred to in sub-section (1) of Section 41 shall be made at the rate notified in this behalf from time to time by the Government. (2) Such deduction shall be made from payments purporting to be the full or part payment of the sale price, being made in respect of all contracts executed, whether in part or in full, after commencement of this Act: Provided that no deduction shall be made on account of the payment pertaining to the following (a) Labour charges for execution of the works contract. (b) Amount paid to sub-contractor on account of labour and services. (c) Charges for planning, designing and architects fees. (d) Charges for obtaining on hire machineries and tools used in the execution of the works contract, (e) Cost of consumables such as water, electricity, fuels, etc. used in execution of the works contract the property in which is not transferred in the course of execution of a works contract, (f) Cost of establishment of the contractor to the extent it is relatable to supply of labour and services. used in execution of the works contract the property in which is not transferred in the course of execution of a works contract, (f) Cost of establishment of the contractor to the extent it is relatable to supply of labour and services. (g) Other similar expenses relatable to supply of labour and services, (h) Profit earned by the contractor to the extent it is relatable to the supply of labour and services, and (i) Goods or transactions exempted under Section 6 or Section 7 of the Act: "Provided further that the amount deducted during a year shall be refunded, in accordance with the provisions of section 68, to the person from whose bills such deductions are made if he does not become liable to tax during the year during which the said deductions were made: Provided also that no such refund shall be made unless the person claiming the refund files, before the Circle In-Charge, an application in Form A-XIII after the end of the financial year during which the deduction or deductions, as the case may be, were made." (3)(i) The person making such deduction under sub-section (1) of Section 41 and responsible for depositing the same shall forward the crossed cheque or a crossed bank draft, drawn in favour of the concerned Circle In-.charge, accompanied by separate challans in Form CH-I in respect of each contractor by the 15th day of the following month. The person making the deduction shall also enclose a statement in Form RT-VI giving details about such deductions. ["Explanation.The expression "concerned Circle In-charge" shall mean: a. The Circle In-charge of the Circle within whose jurisdiction the office of the person making the deduction being situated in case of such office being situated within the:: State of Bihar. b. The Circle In-charge of the Circle specially authorized by the Commissioner in this behalf in case of the office of the person making the deduction being situated outside the State of Bihar:" Provided that no cheque or draft, as aforesaid, shall be accepted by the concerned Circle In-charge unless the same is accompanied by the statement in Form RT-VI. (ii) Where the cheque or draft is on a bank other than a branch of the Reserve Bank of India or the State Bank of India or the bank specially authorized in this behalf, it shall also include an additional amount equal to the actual collection charges. (ii) Where the cheque or draft is on a bank other than a branch of the Reserve Bank of India or the State Bank of India or the bank specially authorized in this behalf, it shall also include an additional amount equal to the actual collection charges. (iii) Upon receipt of the cheque or draft specified in sub-clause (i) the concerned Circle In-charge shall deposit the same in the concerned Treasury or the Bank, as the case may be. (iv) After the deposit is made, the portions of the challan marked "Triplicate" and "Quadruplicate" shall be handed over to the contractor from whose bills the deduction has been made. 4. (i) Every person deducting tax in accordance with sub-section (1) of Section 41 shall, at the time of payment, whether in part or in full, issue to the person from whom such deduction is made, a certificate in Form C-ll and furnish fully and correctly all such particulars as are specified therein. (ii) The certificate mentioned in clause (i) shall be in quadruplicate. (iii) The portions marked "Original" and "Duplicate" shall be handed over to the contractor from whose bills the deductions have been made who shall furnish the portion marked "Original" to the authority specified in Rule 62 as evidence of payment of tax by deduction at source alongwith the return to be filed under Section 24 and the portion marked "Duplicate" shall be retained by the contractor. (iv) The portion marked "Triplicate shall be sent to the concerned Circle In-charge alongwith the relevant Challan. (v) The "Quadruplicate" portion shall be retained by the person issuing this certificate. (5). (i) Every person making the deductions referred to in sub-section (1) of Section 41 shall also send to the Circle In-charge within whose jurisdiction the concerned contractor is registered, a quarterly return in Form RT-VII by the 31st July, 31st October, 31st January and 30th April in respect of the deductions made by him during the quarter immediately preceding. (ii) If any contractor is not registered in any circle, a separate quarterly return shall be sent to the Circle In-charge within whose jurisdiction the concerned contract is being executed. (ii) If any contractor is not registered in any circle, a separate quarterly return shall be sent to the Circle In-charge within whose jurisdiction the concerned contract is being executed. (6) Any deduction made in accordance with the provisions of sub-section (1) of Section 41 and paid in the Government Treasury or the bank, as the case may be, shall be treated, to such extent, as payment of the tax on behalf of the contractor from whom such deduction was made and credit shall be given to him for the amount so deducted and deposited in the Government Treasury or the bank, as the case may be." 21 To have a complete picture of the controversy and the canvas on which it is depicted, it is felt necessitous that the history of these kinds of litigations deserves to be stated. By the Constitution (Forty-Sixth Amendment) Act, 1982, sub-Article 29A was introduced to Article 366 of the Constitution of India by which the authority to impose tax on the transfer of property in goods involved in the execution of a works contract became available to the State Legislature. The constitutional validity of the said amendment was assailed and, eventually, it was upheld by the Apex Court in Builders Association of India V/s. Union of India, [1989] 73 STC 370(SC) [:1989 PLJR (SC)31]. In the said case, the Apex Court considered the scope and ambit of the legislative power to impose the said tax. Be it noted, in the Builders Association of India (supra), the Court was dealing with the contention that it was not open to the States to ignore the provisions contained in Article 286 of the Constitution and the provisions of the Central Sales Tax Act, 1956 , while making assessment under the sales tax laws passed by the Legislatures of the States. Their Lordships had stated that Sales Tax Laws passed by the Legislatures of the States levying taxes on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract are subject to the restrictions and conditions mentioned in each clause or sub-clause of Article 286 of the Constitution. Their Lordships had stated that Sales Tax Laws passed by the Legislatures of the States levying taxes on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract are subject to the restrictions and conditions mentioned in each clause or sub-clause of Article 286 of the Constitution. Their Lordships have further opined as follows: "It may be that by virtue of sub-clause (b) of clause (3) of Article 286 it is open to Parliament to impose some other restrictions or conditions which are not generally applicable to all kinds of sales. That however cannot make the other parts of Article 286 inapplicable to the transactions which are deemed to be sales under Article 366 (29A) of the Constitution. We are of the view that all transfer, deliveries and supplies of goods referred to in sub-clauses (a) to (f) of clause (29A) of Article 366 of the Constitution are subject to the restrictions and conditions mentioned in clause (1), clause (2) and sub-clause (a) of clause (3) of Article 286 of the Constitution and the transfers and deliveries that take place under sub-clauses (b), (c) and (d) of clause (29A) of Article 366 of the Constitution are subject to an additional restriction mentioned in sub-clause (b) of Article 286(3) of the Constitution." 22. It is worth noting that after interpreting the relevant provisions of the Constitution, their Lordships did not express an opinion on the validity of the statutory provisions and the Rules of various legislations which were questioned before the Apex Court and liberty was granted to approach the respective High Courts. Thereafter, fresh writ petitions were filed before various High Courts. In the case of Gannon Dunkerley & Co. and Others (supra), the challenge was to the judgment of the Rajasthan High Court holding the Act as intra vires. In the said decision, the Constitution Bench of the Apex Court held as follows: ".....Ordinarily the cost of establishment is included in the sale price charged by a dealer from the customer for the goods sold. Since a composite works contract involves supply of materials as well as supply of labour and services, the cost of establishment of the contractor would have to be apportioned between the part of the contract involving supply of materials and the part involving supply of labour and services. Since a composite works contract involves supply of materials as well as supply of labour and services, the cost of establishment of the contractor would have to be apportioned between the part of the contract involving supply of materials and the part involving supply of labour and services. The cost of establishment of the contractor which is relatable to supply of labour and services cannot be included in the value of the goods involved in the execution of a contract and the cost of establishment which is relatable to supply of material involved in the execution of the works contract only can be included in the value of the goods. Similar apportionment will have to be made in respect of item No.(viii) relating to profits. The profits which are relatable to the supply of materials can be included in the value of the goods and the profits which are relatable to supply of labour and services will have to be excluded. This means that in respect of charges mentioned in items Nos. (vii) and (viii), the cost of establishment of the contractor as well as the profit earned by him to the extent the same are relatable to supply of labour and services will have to be excluded. The amounts so deductible would have to be determined in the light of the facts of a particular case on the basis of the material produced by the contractor. The amounts so deductible would have to be determined in the light of the facts of a particular case on the basis of the material produced by the contractor. The value of the goods involved in the execution of a works contract will, therefore, have to be determined by taking into account the value of the entire works contract and deducting therefrom the charges towards labour and services which would cover: (a) labour charges for execution of the works; (b) amount paid to a sub-contractor for labour and services; (c) charges for planning, designing and architects fees; (d) charges for obtaining on hire or otherwise machinery and tools used for the execution of the works contract; (e) cost of consumables such as water, electricity, fuel, etc., used in the execution of the works contract the property in which is not transferred in the course of execution of a works contract; and (f) cost of establishment of the contractor to the extent it is relatable to supply of labour and services; (g) other similar expenses relatable to supply of labour and services; (h) profit earned by the contractor to the extent it is relatable to supply of labour and services. The amounts deductible under these heads will have to be determined in the light of the facts of a particular case on the basis of the material produced by the contractor. We may, however, make it clear that apart from the deductions referred to above, it will be necessary to exclude from the value of the works contract the value of the goods which are not taxable in view of Sections 3, 4 and 5 of the Central Sales Tax Act and goods covered by Sections 14 and 15 of the Central Sales Tax Act as well as goods which are exempt from tax under the sales tax legislation of the State. The value of goods involved in the execution of a works contract will have to be determined after making these deductions and exclusions from the value of the works contract." After so holding, their Lordships proceeded to state as follows: "Normally, the contractor will be in a position to furnish the necessary material to establish the expenses that were incurred under the aforesaid heads of deduction for labour and services. But there may be cases where the contractor has not maintained proper accounts or the accounts maintained by him are not found to be worthy of credence by the assessing authority. In that event, a question would arise as to how the deduction towards the aforesaid heads may be made. On behalf of the States, it has been urged that it would be permissible for the State to prescribe a formula on the basis of a fixed percentage of the value of the contract as expenses towards labour and services and the same may be deducted from the value of the works contract and that the said formula need not be uniform for all works contracts and may depend on the nature of the works contract. We find merit in this submission. In cases where the contractor does not maintain proper accounts or the accounts maintained by him are not found worthy of credence it. would, in our view, be permissible for the State Legislature to prescribe a formula for determining the charges for labour and services by fixing a particular percentage of the value of the works contract and to allow deduction of the amount thus determined from the value of the works contract for the purpose of determining the value of the goods involved in the execution of the works contract. It must, however, be ensured that the amount deductible under the formula that is prescribed for deduction towards charges for labour and services does not differ appreciably from the expenses for labour and services that would be incurred in normal circumstances in respect of that particular type of works contract. Since the expenses for labour and services would depend on the nature of the works contract and would not be the same for all types of works contracts, it would be permissible, indeed necessary, to prescribe varying scale for deduction on account of costs of labour and services for various types of works contracts." 23. At this juncture, it is seemly to note that the State Legislature of Orissa brought in by way of amendment Section 13-AA of the Orissa Sales Tax Act, 1947 which dealt with deduction of tax at source from the payment of works contract. At this juncture, it is seemly to note that the State Legislature of Orissa brought in by way of amendment Section 13-AA of the Orissa Sales Tax Act, 1947 which dealt with deduction of tax at source from the payment of works contract. The High Court of Orissa in Brajendra Mishra V/s. State of Orissa, (1994) 92 STC 17 (Orissa) had struck down the said provision being grossly discriminatory and confiscatory in nature. It also held that the amplitude of the existence of tax had been widened so as to include transactions which were outside the sphere of taxation available to the State Legislature under Entry 54 of List-ll of the Seventh Schedule to the Constitution. 24. After the said judgment was delivered, the State Legislature replaced the provision which came to be assailed. The High Court declared the provision to be intra vires. The same was assailed in Steel Authority of India Ltd. (supra) before the Apex Court and their Lordships in paragraph 8 of the said decision proceeded to deal with the power of the State to levy tax on sale or purchase of goods and held thus: "8. By virtue of Entry 54 of List-ll of the Seventh Schedule read with Article 246 of the Constitution of India, the States are empowered to levy taxes on the sale or purchase of goods, other than newspapers. The Forty-sixth Amendment to the Constitution introduced, inter alia, clause (29A)(b) in Article 366 of the Constitution; as a result, tax on the purchase or sale of goods included a tax "on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract". Article 286(1) of the Constitution states that no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place outside the State or in the course of the import of goods into, or export of goods out of the territory of India. Article 286(2) authorises Parliament by law to formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in sub-Article (1). Article 286(2) authorises Parliament by law to formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in sub-Article (1). Acting upon this power, Parliament has set out in Sections 3, 4 and 5 of the Central Sales Tax Act, 1956 principles for determining when a sale or purchase of goods can be said to take place in the course of inter-State trade or commerce, when a sale or purchase of goods can be said to take place outside the State and when a sale or purchase of goods can be said to take place in the course of import or export. In M/s Gannon Dunkerley and Co. & Ors. V/s. State of Rajasthan & Ors., [1993] 88 STC 204(SC): (1993)1 SCC 364 , this Court has held that it is necessary to exclude from the value of a works contract the value of goods which are not taxable by a State in view of Sections 3, 4 and 5 of the Central Sales Tax Act, 1956 . The value of goods involved in the execution of a works contract has to be determined after making these exclusions from the value of the works contract." After so holding, their Lordships in paragraph 9 have held thus: "9. With this background, we turn . to analyse Section 13-AA as it presently stands. By reason of sub-section (1) thereof, the person responsible for paying any sum to any contractor for carrying out any works contract which involves the transfer of property in goods (now, for convenience, referred to as "the owner") is obliged to deduct, at the time of credit of that sum to the account of the contractor or payment thereof to him, an amount "towards- sales tax equal to four per cent of such sum in respect of the works contract", provided the value of the works contract exceeds rupees one lakh. The deduction, therefore, is towards the sales tax that is payable to the State upon the works contract and it is of four per cent of the value of the works contract. Sub-section (2) requires the owner to grant to the contractor a certificate in respect of such deduction. By reason of sub-section (3), the amount that the owner has deducted must be deposited by him into the Government treasury within a week of the deduction. Sub-section (2) requires the owner to grant to the contractor a certificate in respect of such deduction. By reason of sub-section (3), the amount that the owner has deducted must be deposited by him into the Government treasury within a week of the deduction. By reason of sub-section (4), such deposit is required to be adjusted by the Sales Tax Officer towards the sales tax liability of the contractor and it constitutes good and sufficient discharge the liability of the owner to the contractor to the extent of the amount deposited. Sub-section (5)(a) permits the contractor to make an application to the Commissioner of Sales Tax and if the Commissioner is satisfied thereon that any works contract "involves both transfer of property in goods and labour or service or involves only labour or service and, accordingly, justifies deduction of tax on a part of the sum in respect of the works contract or, as the case may be justifies no deduction of tax, he shall,... grant him such certificate as may be appropriate in the manner prescribed". To the extent of the amount mentioned in the certificate the owner must, by reason of sub-section 5(b), make no deduction of tax. The Commissioner is required only to see whether the works contract involves transfer of property in goods and labour or service or only labour or service. If it involves only labour or service, he must certify that no deduction of tax shall be made and if it involves both transfer of property in goods and labour or service, he shall certify the deduction of a part of the sum payable by the owner to the contractor. Sub-section 5(a) takes no account of the fact that even if a works contract involves both transfer of property in goods and labour or service, State sales tax may not be payable upon the entire value ascribable to the transfer of property in goods for the reason that it is in the course of inter-State sales, outside sales or sales in the course of export, nor is such account taken elsewhere in Section 13-AA." Thereafter, the Apex Court referred to the decision in Bhawani Cotton Mills Ltd. (supra) and, eventually, held thus: "13. There can be no doubt, upon a plain interpretation of Section 13-AA, that it is enacted for the purposes of deduction at source of the State sales tax that is payable by a contractor on the value of a works contract. For the purposes of the deduction neither the owner nor the Commissioner who issues to the contractor a certificate under Section 13-AA(5) is entitled to take into account the fact that the works contract involves transfer of property in goods consequent upon of an inter-State sale, an outside sale or a sale in the course of import. The owner is required by Section 13-AA(1) to deposit towards the contractors liability to State sales tax four per cent of such amount as he credits or pays to the contractor, regardless of the fact that the value of the works contract includes the value of inter-State sales, outside sales or sales in the course of import. There is, in our view, therefore, no doubt that the provisions of Section 13-AA are beyond the powers of the State Legislature for the State Legislature may make no law levying sales tax on inter-State sales, outside sales or sales in the course of import." 25. In Nethpa Jhakri Joint Venture (supra), the Apex Court was dealing with the validity of Section 12-A of the Himachai Pradesh General Sales Tax Act (24 of 1968) and Rule 31-A of the Rules framed under the said Act which provided for deduction of an amount from the bills or invoices raised by the works contractor purporting to be tax payable on the transfer of goods and invoices. Their Lordships referred to the decision in Steel Authority of India Limited (supra) and held as follows: "4. A bare perusal of the two provisions will make it clear that in either provision there is an obligation to deduct from transactions relating to works contract on bills or invoices raised by the works contractor an amount not exceeding 4 per cent or 2 per cent, as the case may be. A bare perusal of the two provisions will make it clear that in either provision there is an obligation to deduct from transactions relating to works contract on bills or invoices raised by the works contractor an amount not exceeding 4 per cent or 2 per cent, as the case may be. Though the object of the provision is to meet the tax in respect of the transactions on all works contract on the valuable consideration payable for the transfer of property in goods involved in the execution of the works contract, the effect of the provision is that irrespective of whether the sales are inter-State sales or outside sales or export sales which are outside the purview of the State Act and those transactions in respect of which no tax can be levied even in terms of the enactment itself, such deductions have to be made in the bills or invoices of the contractors. To say that if a person is not liable for payment of tax inasmuch as on completion of the assessment refund can be obtained at a later stage is no solace, as noticed in Bhawani Cotton Mills Ltd. V/s. State of Punjab, [1967] 20 STC 290 (SC): 1967 (3) SCR 577 . Further, there is no provision for certification of the extent of the deduction that can be made by the authority. Therefore, we must hold that arbitrary and uncanalised powers have been conferred on the concerned person to deduct up to 4 per cent from the sum payable to the works contractor irrespective whether ultimately the transaction is liable for payment to any sales tax at all. In that view of the matter, we have no hesitation in rejecting the contention advanced on behalf of the State." 26. In Rapti Commission Agency V/s. State of U.P. and Others, (2006)6 SCC 522 , their Lordships were dealing with the Division Bench decision of the Allahabad High Court wherein the appellant challenged the constitutionality of Section 8-E of the U.P. Trade Tax Act, 1948. After noting the rival submissions and referring to the decisions in Nethpa Jhakri Joint Venture (supra) and Steel Authority of India Limited (supra), their Lordships came to hold as follows: "13. The High Court also observed that it was reading down and narrowing down the language of the provision to sustain the constitutional validity of the same. After noting the rival submissions and referring to the decisions in Nethpa Jhakri Joint Venture (supra) and Steel Authority of India Limited (supra), their Lordships came to hold as follows: "13. The High Court also observed that it was reading down and narrowing down the language of the provision to sustain the constitutional validity of the same. It was observed that the language of Section 8-E can be narrowed down so as to make it applicable only to intra-State sales/purchases. The appellant in fact raised the dispute on the factual aspects contending that the transaction was one of inter-State character. Its emphasis was on the validity of the provision vis-a-vis inter-State transactions. There was no necessity of any reading down as there was no dispute in the case at hand relating to intra-State sales. The question of appellant having liability to pay purchase tax was also not a relevant factor for determination of the basic question regarding validity of Section 8-E. The nature of a transaction cannot be decided on the basis of the provisions of a taxation statute. It has to be factually examined. The High Court instead of focussing on the factual aspects dealt with issues not relevant, and that too giving clearly indefensible interpretations. The factual aspects should have been asked to be dealt with by the authorities. By directing the authorities to do it after laying down the law, which as noted down was not the correct position in law, would really serve no purpose. On the facts of the case, there is no need to decide the question relating to validity of Section 8-E of the Act except stating that the provision is subject to what has been stated in Steel Authoritys case (supra) and M/s Nathpa Jhakris case (supra), for which the factual determination has to be done by the authorities........" 27. At this juncture, we may sit in a time-machine and refer to the challenge that was made in Section 25A of the Bihar Finance Act, 1981 . Much emphasis has been laid by Dr. Devi Pal, learned Senior Counsel for the petitioners, on the verdict given in Larsen and Toubro Ltd. V/s. State of Jharkhand & Ors. (supra). The provision that was called in question was Section 25A of Bihar Finance Act. 28. The present provision which is under assail is Section 41 of the VAT Act which has been reproduced hereinabove. Devi Pal, learned Senior Counsel for the petitioners, on the verdict given in Larsen and Toubro Ltd. V/s. State of Jharkhand & Ors. (supra). The provision that was called in question was Section 25A of Bihar Finance Act. 28. The present provision which is under assail is Section 41 of the VAT Act which has been reproduced hereinabove. 29. Dr. Devi Pal, learned Senior Counsel, has drawn immense inspiration from the decision in Larsen and Toubro Ltd. V/s. State of Jharkhand & Ors. (supra) wherein Apex Court was considering the validity of Section 25A of the Bihar Finance Act, 1981 . The Bench referred to the decision of the Patna High Court [Larson and Toubro Ltd. V/s. State of Bihar (supra)], decided on 19th July,1999. After bifurcation of the State of Bihar under the Bihar Reorganization Act, 2000, the Act and all statutory forms, circulars, and notifications which were in force on November 15, 2000, were adopted by the State of Jharkhand. After the bifurcation, the State of Jharkhand introduced a third proviso to Section 25A of the Finance Act by amending the Jharkhand Finance Act, 2001. The third proviso reads as under: "Provided that under the following circumstances there shall be no deduction of tax at source provided the Joint Commissioner of Commercial Taxes (Administration) issues a certificate to be produced before the concerned authority to the following effect: (i) Sales under Sections 3, 4 and 5 of the Central Sales Tax Act, 1956 , (ii) Sales/supplies under Sections 14 and 15 of the Central Sales Tax Act, 1956 , (iii) On the amount to be paid by the contractor to sub-contractor provided the sub-contractor is a registered dealer and it is established that the sub-contractor has included the payment receipt from the contractor in his returns. (iv) Labour and services, designs, programmes, establishments, consumable articles, water, electricity, etc., and also on the machines and equipments hired on rent. All those goods will pass on in the same form and/or are supplied in the same form. (iv) Labour and services, designs, programmes, establishments, consumable articles, water, electricity, etc., and also on the machines and equipments hired on rent. All those goods will pass on in the same form and/or are supplied in the same form. Explanation.person in this section includes all officers and authorities of the Central or State Government or of a company, corporation, board, authority, co-operative society, undertaking or any other body constituted or formed under any Act and of any firm or association of persons and organization." The said amendment that was made was treated as an attempt by the Court to take out of the purview of the Act, sales outside the taxing power of the State either as covered by the Central Sales Tax Act, or as forming part of an inter-State sale. 30. The Division Bench referred to the earlier decision rendered by the Patna High Court and came to hold as under: "15. Of course, one way of getting out of it would be to say that the Joint Commissioner would simply accept any declaration that may be made by the principal contractor as regards the excludable components involved in a works contract. But as pointed out by learned counsel for the petitioner, even this may become impossible in the sense that the parties could not say with certainty that a particular sale of goods involved in a works contract would only be a local sale within the competence of the State Legislature to tax and would not be an outside sale or inter-State sale. Most of the works contracts are long-term contracts and procuring of the goods to be supplied by the contractors would depend upon their availability at the relevant time and the sources from which it could be purchased at competitive rates. Therefore, neither the principal contractor who is bound to make the deduction, nor the works contractor would really be in a position to declare which part of the transaction of sale would be amenable to taxation and which part of it would not be amenable to taxation under the Finance Act. Therefore, it will be placing an unrealistic obligation on a principal contractor to make a declaration of what part of the gross value of the contract would be amenable to taxation under the State Finance Act and what part of it will be outside the same. Therefore, it will be placing an unrealistic obligation on a principal contractor to make a declaration of what part of the gross value of the contract would be amenable to taxation under the State Finance Act and what part of it will be outside the same. There will also be the imposition of a possible penalty, if the declaration is found to be untrue at a subsequent stage. 16. Learned counsel for the petitioner pointed out that the petitioner as a contractor was filing regular monthly or quarterly returns and paying taxes on the amount received by it under the works contract, which, in its reckoning, becomes liable to tax under the State Finance Act. It was, therefore, not as if there was no adequate protection for the State in the matter of collecting tax due from a contractor. After all, Section 25A(1) of the Act is intended to be a machinery to facilitate the collection of tax due to State and to protect the interests of the State in the matter of collection. From that point of view, a provision for deduction at source, as it were, could not be said to be beyond the power of the State. But when the provision is so indefinite and might lead to considerable difficulties, the court has necessarily to consider its validity in the context of those facts. Even in this case, though we passed an interim direction to the Joint Commissioner to issue a certificate in terms of the third proviso to Section 25A of the Act by our order dated June 20, 2003, it was submitted at the time of hearing that no such certificate had been issued by the Joint Commissioner even at the time of the hearing of the writ petition. 17. We do not find much merit in the contention of learned counsel for the petitioner that the issuance of the certificate by the Joint Commissioner would preclude the assessing authority from applying his mind and completing the assessment, since he was only an officer subordinate to the Joint Commissioner. Issuance of a certificate under the third proviso to Section 25A(1) of the Act is entirely different from the process of assessment to be completed by the assessing officer. Issuance of a certificate under the third proviso to Section 25A(1) of the Act is entirely different from the process of assessment to be completed by the assessing officer. It is not as if the assessing officer cannot go behind the certificate or beyond the certificate issued by the Joint Commissioner and complete the assessment based on the actual transactions disclosed before him at the time of assessment. It is not reasonable to expect that an assessing authority will complete the assessment not based on the materials available before him at the time of assessment, but would be guided by a certificate issued on estimate by the Joint Commissioner." After so stating, their Lordships expressed the view that Section 25A(1) of the Act is not workable, arbitrary and unreasonable and the addition of the third proviso to Section 25A(1) of the Act has failed to remove the defects in Section 25A of the Bihar Finance Act, as has been pointed out by the Patna High Court in Larsen and Toubro Ltd. (supra). 31. In this context, it would not be out of place to quote a passage from Ganga Sugar Corpn. Ltd. V/s. State of U.P., (1980) 1 SCC 223 wherein their Lordships have held thus: "Article 14, a great right by any canon, by its promiscuous forensic misuse, despite the Dalmia decision has given the impression of being the last sanctuary of losing litigants. In the present case, the levy which is uniform on all sugarcane purchase, is attacked as ultra vires, on the score that the sucrose content of various consignments may vary from place to place, the range of variation being of the order of 8 to 10 per cent and yet a uniform levy by weight on these unequals is sanctioned by the Act. Price of cane is commended as the only permissible criterion for purchase tax. The whole case is given away by the very circumstance that, substantially, the sucrose content is the same for sugarcane in the State, the marginal difference being too inconsequential to build a case of discrimination or is blameable on the old machinery. Neither in intent nor in-effect is there any discriminatory treatment discernible to the constitutional eye. Price is surely a safe guide but other methods are not necessarily vocational. It depends. Neither in intent nor in-effect is there any discriminatory treatment discernible to the constitutional eye. Price is surely a safe guide but other methods are not necessarily vocational. It depends. Practical considerations of the administration, traditional practices in the trade, other economic pros and cons enter the verdict but, after a judicial generosity is extended to the legislative wisdom, if there is writ on the statute perversity, madness in the method or gross disparity, judicial credulity may snap and the measure may meet with its funeral. Even so, taxing statutes have enjoyed more judicial indulgence. This Court has uniformly held that classification for taxation and the application of Article 14, in that context, must be viewed liberally, not meticulously. We must always remember that while the executive and legislative branches are subject to judicial restraint, the only check upon our exercise of power is our own sense of self-restraint." 32. In State of Chhattisgarh and Ors. V/s. VTP Constructions, (2008) 2 SCC 578 , the State of Chhattisgarh had challenged the judgment rendered by the Division Bench of the Chhattisgarh High Court declaring Section 35 of the Chhattisgarh Vanijyik Kar Adhiniyam, 1994 as unconstitutional. The Apex Court referred to the decisions rendered in Steel Authority of India Ltd. (supra) and Nathpa Jhakri Jt.Venture (supra) and expressed the opinion that the view taken by the High Court was correct. Be it noted, the High Court in VTP Constructions V/s. State of Chhattisgarh & Ors. [2006] 145 STC 185 referred to the decision rendered in Bhawani Cotton Mills Ltd. (supra) and discussed the controversy in paragraphs 9 and 10 and held thus: "Thus, there can be no doubt, upon a plain interpretation of Section 35 of the Adhiniyam, that section is enacted for the purposes of deduction at source of the State sales tax that is payable by a contractor on the value of a works contract. For the purposes of the deduction, the person letting out a works contract is entitled (sic) to take into account the fact that the works contract involves transfer of property in goods consequent upon of an inter-State sale, an outside sale or a sale in the course of import. For the purposes of the deduction, the person letting out a works contract is entitled (sic) to take into account the fact that the works contract involves transfer of property in goods consequent upon of an inter-State sale, an outside sale or a sale in the course of import. In other words, the person letting out a works contract is required by sub-section (1) of Section 35 of the Adhiniyam to deposit towards the contractors liability to State sales tax of 2 per cent of such amount as he pays to the contractor, regardless of the fact that the value of the works contract includes the value of inter-State sales, outside sales or sales in the course of import. Thus, it is quite clear that the State Legislature in enacting Section 35 of the Adhiniyam acted beyond the power granted to it under Article 246 of the Constitution read with List-I, Entry 92-A and List-ll, Entry 54 of the Seventh Schedule. 10. The provisions of Section 13-AA (as replaced in 1993) of the Orissa Sales Tax Act, 1947 and that of Section 12-A of the Himachal Pradesh General Sales Tax Act, 1968 which are substantially similar to the provisions of Section 35 of the Adhiniyam are struck down by the Supreme Court as unconstitutional on the ground that the provisions were beyond the purview of the State Legislature in the case of Steel Authority of India Ltd. V/s. State of Orissa, [2000] 118 STC 297 and Nathpa Jhakri Jt. Venture V/s. State of Himachal Pradesh, [2000] 118 STC 306." After so discussing, the Bench held thus: "14. Thus, it is quite clear that in the light of the judgments of the Supreme Court in Steel Authority of India Ltd. V/s. State of Orissa, [2000] 118 STC 297, Bhawani Cotton Mills Ltd. V/s. State of Punjab, [1967] 20 STC 290 (SC) and Nathpa Jhakri Jt. Venture V/s. State of Himachal Pradesh, [2000] 118 STC 306, the constitutional validity of Section 35 cannot be upheld and it is liable to be struck down." 33. Dr. Pal, learned Senior Counsel for the petitioners, has drawn our attention to the decision rendered in Govind Saran Ganga Saran V/s. Commissioner of Sales Tax and Others, (1985) 60 STC 1 wherein the Apex Court has stated thus: "The components which enter into the concept of a tax are well known. Dr. Pal, learned Senior Counsel for the petitioners, has drawn our attention to the decision rendered in Govind Saran Ganga Saran V/s. Commissioner of Sales Tax and Others, (1985) 60 STC 1 wherein the Apex Court has stated thus: "The components which enter into the concept of a tax are well known. The first is the character of the imposition known by its nature which prescribes the taxable even attracting the levy, the second is a clear indication of the person on whom the levy is imposed and who is obliged to pay the tax, the third is the rate at which the tax is imposed, and the fourth is the measure or value to which the rate will be applied for computing the tax liability. If those components are not clearly and definitely ascertainable, it is difficult to say that the levy exists in point of law. Any uncertainty or vagueness in the legislative scheme defining any of those components of the levy will be fatal to its validity." 34. In Steel Authority of India Ltd. (supra), it is worth noting that their Lordships have also observed as follows: "There can be no doubt, upon a plain interpretation of Section 13-AA, that it is enacted for the purposes of deduction at source of the State Sales Tax that is payable by the contractor on the value of a works contract. For the purposes of the deduction neither the owner nor the Commissioner who issues to the contractor a certificate under Section 13-AA (5) is entitled to take into account the fact that the works contract involves transfer of property in goods consequent upon of an inter-State sale, an outside sale or a sale in the course of import. The owner is required by Section 13-AA(1) to deposit towards the contractors liability to State Sales tax four per cent of such amount as he credits or pays to the contractor, regardless of the fact that the value of the works contract, includes the value of inter-State sales, outside sales or sale in the course of import. The owner is required by Section 13-AA(1) to deposit towards the contractors liability to State Sales tax four per cent of such amount as he credits or pays to the contractor, regardless of the fact that the value of the works contract, includes the value of inter-State sales, outside sales or sale in the course of import. There is, in our view, therefore, no doubt that the provisions of Section 13-AA are beyond the powers of the State Legislature for the State Legislature may make no law levying sales tax on inter-State Sales, outside sales or sales in the course of import." After so stating, their Lordships opined thus: "Section 13-AA should have been precisely drafted to make it clear that no tax was levied on that part of the amount credited or paid that related to inter-State sales, outside sales and sales in the course of import, particularly after the previous Section 13-AA had been struck down by the Orissa High Court for the reason that it was couched in terms wider than were permissible to the State Legislature and that judgment was accepted." 35. In this regard, we may refer with profit to the Full Bench decision of the Madhya Pradesh High Court in Jaiprakash Associates Ltd. V/s. State of M.P. and Ors., [2007] 6 VST 1 (MP)[FB] wherein the Full Bench was considering the constitutional validity of Sections 35 and 35(1) of the Madhya Pradesh Commercial Tax Act,1994. After reproducing Section 35 which deals with deduction at source of tax payable by a contractor, the Bench has held as follows: "A plain reading of Section 35(1) of the Act quoted above, will show that in a case of a works contract of the value exceeding one lac rupees which involved sale of any goods in the course of execution thereof by the contractor, a deduction at the rate of two per cent on the value of such works contract is to be made. There is no provision in Section 35(1) of the Act quoted above for exclusion of sales outside the State of Madhya Pradesh, sales in the course of inter-State trade and commerce, sales in the course of export and import of goods covered. There is no provision in Section 35(1) of the Act quoted above for exclusion of sales outside the State of Madhya Pradesh, sales in the course of inter-State trade and commerce, sales in the course of export and import of goods covered. The opening words in Section 35(1) of the Act further states that "notwithstanding anything contained in any other provision of this Act", the deduction has to be made at the rate of two per cent of the value of works contract. Thus, even though a provision is made under Section 79 of the Act that a tax on sale or purchase of goods shall not be imposed on sales which take place outside the State of Madhya Pradesh, in the course of inter-State trade and commerce or in the course of export and import of goods, there is no scope at all to exclude the categories of sale mentioned in Section 79 of the Act from the value of the works contract for the purpose of deduction of sales tax at source at the rate of two per cent of the value of the contract under Section 35 of the Act. It is true as has been submitted by Mr. Sanjay Yadav that Section 35(1) has to be read alongwith Section 35A, but a reading of Section 35A of the Act as quoted above would show that the said Section 35A does not provide for excluding from the value of works contract sales made outside the State of Madhya Pradesh, sales made in the course of inter-State trade and commerce and sales made in the course of export and import of goods. There are also no guidelines whatsoever in Section 35A of the Act that while issuing a certificate in writing in the prescribed form in the prescribed manner by the prescribed authority, sales made outside the State of Madhya Pradesh, sales made in the course of inter-State trade and commerce and sales made in the course of export and import of goods will be excluded from the value of contract for the purpose of two per cent deduction at source. Thus, even if Section 35 is read alongwith Section 35A of the Act as suggested by Mr. Thus, even if Section 35 is read alongwith Section 35A of the Act as suggested by Mr. Sanjay Yadav, Section 35 of the Act, which does not provide for exclusion of the aforesaid categories of sales on which no sales tax can be levied by the State Legislature under Entry 54 of List-ll of the Seventh Schedule to the Constitution of India, cannot be saved." 36. A Division Bench of this Court in Larsen and Toubro Ltd. (supra), while holding Section 25A of the Bihar Finance Act, 1981 as ultra vires, has held that the said provision is ultra vires to the extent it relates to transfer of property in goods taking place in the course of inter-State trade or commerce of a sale outside the State or in the course of import within the ambit of Sections 3, 4 and 5 of the Central Sales Tax Act, or the "declared goods" within the meaning of Sections 14 and 15 of the said Act. It has further been expressed therein that it is also ultra vires to the extent it provides for deduction from payment made on account of labour charges and other services towards sales tax. After the said judgment, the provision has been amended, as has been reproduced hereinabove. 37. Section 41 of the VAT Act begins with Subject to the provisions of Section 6. Section 6 of the Act reads as under: "6. Non-levy of tax in certain cases. No tax shall be payable under this Act on sales or purchases of goods which have taken place (a) in the course of inter-State trade or commerce; (b) outside the State of Bihar; (c) in the course of import of goods into, or, export of goods out of, the territory of India. (2) The provisions of the Central Sales Tax Act, 1956 (74 of 1956) shall apply for determining when a sale or purchase of goods shall be deemed to have taken place in any of the ways mentioned in clause (a) or clause (b) or clause (c) of sub-section (1)." 38. We have referred to the aforesaid decisions to highlight that the inter-State sales which are not imposable by the State Legislature have been excluded and the provision has been made subject to Section 6. The provision also lays a postulate that the deduction shall be made in the manner prescribed. We have referred to the aforesaid decisions to highlight that the inter-State sales which are not imposable by the State Legislature have been excluded and the provision has been made subject to Section 6. The provision also lays a postulate that the deduction shall be made in the manner prescribed. Rule 29 of the VAT Rules categorically stipulates that no deduction shall be made on account of the payment pertaining to labour charges for the execution of the works contract, amount paid to sub-contractor on account of labour and services, charges for planning, designing and architects fees, charges for obtaining on hire machineries and tools used in the execution of the works contract, cost of consumables such as water, electricity, fuels, etc. used in execution of the works contract the property in which is not transferred in the course of execution of a works contract, cost of establishment of the contractor to the extent it is rentable to supply of labour and services, other similar expenses relatable to supply of labour and services, profit earned by the contractor to the extent it is relatable to the supply of labour and services, and goods or transactions exempted under Sections 6 or 7 of the Act. 39. The gravamen of submission of Dr. Pal is that there is no machinery provision and, in fact, it has been couched in such a manner that there is no determination and there can be collection of tax in respect of certain items which would be beyond the legislative competence of the State Legislature. 40. In this connection, we may refer with profit to the decision rendered in Cibatul Limited, P.O. Atul V/s. Union of India, (1979) ELT 407 wherein the High Court of Gujarat has held thus: "It is true that when Parliament levies a tax, it also provides machinery for collecting it. Ordinarily, if the levy of a tax is constitutionally valid, the machinery provided to make it effective does not suffer from a constitutional vice. However, when, under the Constitution, the Parliament has legislative competence to levy a particular tax and when it does so, it cannot competently enact the machinery section which in the name of collecting that particular tax collects something else which is not within the legislative competence of Parliament to levy or collect. However, when, under the Constitution, the Parliament has legislative competence to levy a particular tax and when it does so, it cannot competently enact the machinery section which in the name of collecting that particular tax collects something else which is not within the legislative competence of Parliament to levy or collect. Therefore, the general principle that if the charging section is intra vires, the machinery section cannot be ultra vires is subject to the exception that machinery section does not stretch its long arms to pick-up the forbidden fruit alongwith others. Parliament having levied a tax is entitled to provide the mode of. its assessment and the method of its collection. However, the mode of its assessment and the method of its collection cannot entrench upon the legislative field earmarked exclusively for the States. In the instant case, though Section 3 is valid (its constitutionality has not been challenged), Section 4 suffers from a vice because it entrenches upon Entry 54 in the State List." 41. In Khyerbari Tea Co. Ltd. V/s. State of Assam, AIR 1964 SC 925 , it has been held thus: "It may be conceded that whe the Legislature construes a machinery for the recovery of the taxes which it is within its competence to impose, the said machinery should have some rational or intelligent connection with the tax. In the absence of a rational nexus between the producer and the tax on goods carried, it may be open to a citizen to contend that the tax is not one justified by Entry 56." 42. In this context, it is apposite to refer to the decision in Associated Cement Co. Ltd. V/s. Comml. Tax Officer (S.C.), [1981] 48 STC 466 wherein it has been held as follows: "It is settled law that a distinction has to be made by courts while interpreting, the provisions of a taxing statute between charging provisions which impose the charge to tax and machinery provisions which provide the machinery for the quantification of the tax and the levying and collection of the tax so imposed. While charging provisions are construed strictly, machinery sections are not generally subject to a rigorous construction. The courts are expected to construe the machinery sections in such a manner that a charge to tax is not defeated. While charging provisions are construed strictly, machinery sections are not generally subject to a rigorous construction. The courts are expected to construe the machinery sections in such a manner that a charge to tax is not defeated. The above rule of construction of a taxing statute has been adopted by this Court in India United Mills Ltd. V/s. Commissioner of Excess Profits Tax, Bombay, [1955] 27 I.T.R. 20(S.C): [1955] 1 S.C.R. 810, in which Section 15 of the Excess Profits Tax Act came up for consideration. The court observed in that case thus: "That section is, it should be emphasized, not a charging section, but a machinery section. And a machinery section should be so construed as to effectuate the charging sections." The above principle was followed by this Court in Gursahai Saigal V/s. Commissioner of Income-tax, Punjab, [1963] 48 I.T.R. 1(S.C): [1963] 3 S.C.R. 893, in which it was observed thus: "Now it is well-recognised that the rule of construction on which the assessee relies applies only to a taxing provision and has no application to all provisions in a taxing statute. It does not, for example, apply to a provision not creating a charge for the tax but laying down the machinery for its calculation or procedure for its collection. The provisions in a taxing statute dealing with machinery for assessment have to be construed by the ordinary rules of construction, that is to say, in accordance with the clear intention of the legislature which is to make a charge levied effective." In deciding Gursahai Saigals case the court followed the observations made by the Privy Council in Commissioner of Income-tax V/s. Mahaliram Ramjidas [1940] 8 I.T.R. 442(P.C): AIR 1940 P.C. 124 and by the House of Lords in Whitney V/s. Commissioners of Inland Revenue, [1926] A.C. 37. In the case of Mahaliram Ramjidas, the Privy Council observed: "The section, although it is part of a taxing act, imposes no charge on the subject, and deals merely with the machinery of assessment. In interpreting provisions of this kind the rule is that that construction should be preferred which makes the machinery workable, utlres valeat potius quam pareat." In Whitneys case, (1926) A.C. 37, Lord Dunedin made the following observations: "My Lords, I shall now permit myself a general observation. In interpreting provisions of this kind the rule is that that construction should be preferred which makes the machinery workable, utlres valeat potius quam pareat." In Whitneys case, (1926) A.C. 37, Lord Dunedin made the following observations: "My Lords, I shall now permit myself a general observation. Once that it is fixed that there is liability, it is antecedently highly improbable that the statute should not go on to make that liability effective. A statute is designed to be workable and the interpretation thereof by a court should be to secure that object unless crucial omission or clear direction makes that end unattainable. Now,there are three stages in the imposition of a tax: there is the declaration of liability, that is the part of the statute which determines what persons in respect of what property are liable. Next, there is the assessment. Liability does not depend on assessment. That ex hypothesi has already been fixed. But assessment particularises the exact sum which a person liable has to pay. Lastly, come the methods of recovery, if the person taxed does not voluntarily pay." 43. In R.K. Garg V/s. Union of India (SC), [1982] 133 ITR 239, their Lordships have held thus: "Another rule of equal importance is that laws relating to economic activities should be viewed, with greater latitude than laws touching civil right such as freedom of speech, religion etc. It has been said by no less a person than Holmes, J., that the Legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit a solution through any doctrinaire or strait-jacket formula and that is particularly true in the case of legislation dealing with economic matters, where, having regard to the nature of the problems required to be dealt with, greater play in the joints has to be allowed to Legislature. The court should feel more inclined to give judicial deference to legislative judgment in the field of economic regulation than in other areas where fundamental human rights are involved. Nowhere has this admonition been more felicitously expressed than in Morey V/s. Doud, [1957] 354 US 457, where Frankfurter, J., said in his inimitable style: "In the utilities, tax and economic regulation cases, there are good reasons for judicial self-restraint if not judicial deference to legislative judgment. The Legislature after all has the affirmative responsibility. Nowhere has this admonition been more felicitously expressed than in Morey V/s. Doud, [1957] 354 US 457, where Frankfurter, J., said in his inimitable style: "In the utilities, tax and economic regulation cases, there are good reasons for judicial self-restraint if not judicial deference to legislative judgment. The Legislature after all has the affirmative responsibility. The courts have only the power to destroy, not to reconstruct. When these are added to the complexity of economic regulation, the uncertainty, the liability to error, the bewildering conflict of the experts, and the number of times the judges have been overruled by events-self-limitation can be seen to be the path to judicial wisdom and institutional prestige and stability. The court must always remember that "legislation is directed to practical problems, that the economic mechanism is highly sensitive and complex, that many problems are singular and contingent, that laws are not abstract propositions and do not relate to abstract units and are not to be measured by abstract symmetry" that exact wisdom and nice adaption of remedy are not always possible and that "judgment is largely a prophecy based on meager and uninterpreted experience". Every legislation particularly in economic matter is essentially empiric and it is based on experimentation or what one may call trial and error method and, therefore, it cannot provide for all possible situations or anticipate all possible abuses. There may be crudities and inequities in complicated experienced economic legislation but on that account alone it cannot be struck down as invalid. The courts cannot, as pointed out by the United States Supreme Court in Secretary of Agriculture V/s. Central Reig "Refining Company ([1950] 94 L Ed. 381), be covered into tribunals for relief from such crudities and inequities. There may even be possibilities of abuse, but that too cannot of itself be a ground for invalidating the legislation, because it is not possible for any Legislature to anticipate as if by some divine prescience, distortions and abuses of its legislation, which may be made by those subject to its provisions, and to provide against such distortions and abuses. Indeed, however, great may be the care bestowed on its framing, it is difficult to conceive of a legislation which is not capable of being abused by perverted human ingenuity. Indeed, however, great may be the care bestowed on its framing, it is difficult to conceive of a legislation which is not capable of being abused by perverted human ingenuity. The Court must, therefore, adjudge the constitutionality of such legislation by the generality of its provisions and not by its crudities or inequities or by the possibilities of abuse of any of its provisions. If any crudities, inequities or possibilities of abuse come to light, the Legislature can always step in and enact suitable amendatory legislation. That is the essence of pragmatic approach which must guide and inspire the Legislature in dealing with complex economic issues." 44. In CIT Bengal V/s. Mahaliram Ramjidas, [1940] 8 ITR 442, their Lordships have held thus: "In interpreting a section of a taxing Act which deals merely with the machinery of assessment and does not impose a charge on the subject, that construction should be preferred which makes the machinery workable, utlres valeat potius quam pareat." 45. In Venkateshwara Theatre V/s. State of Andhra Pradesh & Ors., [1995] 96 STC 130, their Lordships quoted with approval the following passage from the decision of San Antonio Independent School District V/s. Rodriguez, [1973]411 US 1 wherein Justice Steward, speaking for the majority, observed thus: "No scheme of taxation, whether the tax is imposed on property, income or purchases of goods and services, has yet been devised which is free of all discriminatory impact. In such a complex arena in which no perfect alternatives exist, the court does wellnot to impose too rigorous a standard of scrutiny lest all local fiscal schemes become subjects of criticism under the equal protection clause." 46. We have referred to the aforesaid decisions to understand the real distinction between a non obstante clause and subject to. The Legislature has clearly excluded the taxes that are not imposable by the State Legislature subject to Section 6. That apart, sub-section (4) of Section 41 of the Act lays a postulate that the deduction referred to in sub-section (1) shall be made in the manner prescribed. Rule 29 of the Rules deals with the prescribed procedure. It clearly lays down that no deduction shall be made on account of payment pertaining to certain items which are really not excisable to tax by the State Legislature. Rule 29 of the Rules deals with the prescribed procedure. It clearly lays down that no deduction shall be made on account of payment pertaining to certain items which are really not excisable to tax by the State Legislature. Section 41(2)(b) of the Act lays down that if the dealer produces a certificate issued from the Deputy Commissioner, Commercial Taxes or the Assistant Commissioner, Commercial Taxes or the Commercial Taxes Officer, In-charge of the concerned Circle to the effect that the payment or any part thereof relates to such transfer of property in goods (whether as goods or in some other form) on which he has no further liability to pay tax in terms of the provisions of Section 15 of the Central Sales Tax Act, 1956 shall stand excluded. Sub-section 2(c) also stipulates such a certificate to be obtained from the said authorities in terms of the provisions of Section 6. Such kind of provision did not exist in Section 25A of the Bihar Finance Act. The Division Bench declared the said provision as ultra vires, after repelling the submissions of the State. 47. In the case of Larsen and Toubro Ltd. & Ors. (supra), the Division Bench has also adverted to double taxation. The present provision, in our considered opinion, provides enough mechanism. In Jaiprakash Associates Ltd. (supra), the constitutional validity of Section 35(1) of the Madhya Pradesh Commercial Tax Act, 1994 which commenced with a non obstante clause was challenged and the Bench observed, as has been indicated earlier, that there is no provision in Section 35(1) for exclusion of tax for sales outside the State of Madhya Pradesh, sales in the course of inter-State trade and commerce, sales in the course of export and import of goods covered. Emphasis was laid on the non-obstante clause. The same is not the provision here. 48. It is not a provision which can be stated that the owner would act ex meromotu (that is to say, from ones own impulse or accord). It is because there is immense guidance and mechanism which does control and govern the deduction. It can be stated with certitude that applying the principle of ex-naturale, that from the very nature of the case, it is clear as day, that the provision does provide a machinery. It is because there is immense guidance and mechanism which does control and govern the deduction. It can be stated with certitude that applying the principle of ex-naturale, that from the very nature of the case, it is clear as day, that the provision does provide a machinery. It cannot be conceived that there would be a pre-assessment prior to the assessment as the learned Senior Counsel for the petitioners would submit. The provision lays a clear postulate that a certificate can be obtained from the Deputy Commissioner, Commercial Taxes or the Assistant Commissioner, Commercial Taxes or the Commercial Taxes Officer, In-charge of the concerned Circle. True it is, in Larsen and Toubro Ltd. & Ors. (supra), the Jharkhand High Court did not think it to be an adequate machinery. With due respect and all the humility at our command, we are unable to agree with the said view. As the provision would clearly exposit, it does not take in its net such sales on which tax cannot be imposed by the State Legislature. There is an elaborate exclusion which has been provided in the Act and the Rules. The Deputy Commissioner, Commercial Taxes or the Assistant Commissioner, Commercial Taxes or the Commercial Taxes Officer, In-charge of the concerned Circle, have been authorized to give certificates which part is taxable and which is not. We really perceive no difficulty as to how a contractor cannot really satisfy anyone or the said authorities to have a prima facie view on the same. Needless to emphasize, the certificate issued would be subject to assessment. The colossal grievance that has been put forth by the learned Senior Counsel for the petitioners that the provision is unworkable as well as arbitrary cannot be given acceptation as there is adequate mechanism and the provision is reasonably and acceptably workable. What is to be seen is whether the provision in its very nature imposes such tax what is not permissible to be levied by the State Legislature. The dictum in Steel Authority of India Ltd. (supra), Neptha Jhakri Jt. Venture (supra) and M/s Bhawani Cotton Mills Ltd. (supra) are distinguishable as the provisions under assail were different. 49. In view of our preceding analysis we conclude and hold that Section 41 of the VAT Act and Rule 29 of the VAT Rules are intra vires. The dictum in Steel Authority of India Ltd. (supra), Neptha Jhakri Jt. Venture (supra) and M/s Bhawani Cotton Mills Ltd. (supra) are distinguishable as the provisions under assail were different. 49. In view of our preceding analysis we conclude and hold that Section 41 of the VAT Act and Rule 29 of the VAT Rules are intra vires. Inevitably, the result is the dismissal of the writ petitions which we direct. In the facts and circumstances there shall be no order as to costs.