JUDGMENT : M.R. SHAH, J. 1. By way of this petition under Article 226 of the Constitution of India, the petitioner – dealer has prayed to quash and set aside the impugned order dated 4.10.2006 passed by the learned Gujarat Value Added Tax Tribunal (hereinafter referred to as the “Tribunal”) as well as order passed by the Deputy Commissioner of Income Tax demanding the tax, penalty and interest under the provisions of Gujarat Sales Tax Act, 1969, for the Financial Years 2001-02 and 2002-03. 2. The facts leading to the present Special Civil Application in nutshell are as under: 2.1. According to the petitioner original petitioner Essar Construction Limited a Public Limited Company registered and incorporated under the provisions of Companies Act, 1956 was engaged, inter alia, in the business of Turnkey Engineering, Procurement and Construction Projects. The said business includes among other activities, the activity of laying pipelines, inter alia, for supply of water. That the original petitioner was holding a registration certificate under the Gujarat Sales Tax Act, 1969 as well as under the Central Sales Tax Act, 1956. 2.2. The dispute is with respect to the execution of three pipelines contracts undertaken and completed by the original petitioner Essar Construction Limited, in the State of Gujarat pursuant to; (i) the two Work Orders, both dated 23.4.2001, issued by the Gujarat Water Supply and Sewerage Board (hereinafter referred to as the “Board”), and (ii) one Work Order dated 18.08.2001 issued by the Engineering Projects (India) Limited (hereinafter referred to as the “EPIL”), all in the name of Essar Projects Limited, which Work Orders were subsequently transferred to the original petitioner by Essar Projects Limited. The works were known as NC6, NC7 and NC12 respectively. NC6 was for laying pipelines between Morbi and Maliya in District Rajkot involving a distance of 26 kms for a lump sum price of Rs.76,76,50,000/-payable by the Board to the original petitioner. NC7 was for laying pipelines between Morbi and Tankara in District Rajkot involving a distance of 34 kms for a lump sum price of Rs.95,88,55,180/. NC12 was for laying pipelines from Tankara to Gauridad in District Rajkot involving a distance of 26 kms for a lump sum price of Rs.48,11,73,000/-payable by EPIL to the original petitioner under a sub-contract. 2.3. According to the original petitioner, the said work orders/contracts were “Engineering, Procurement and Commissioning” contracts on EPC/Turnkey basis. NC12 was for laying pipelines from Tankara to Gauridad in District Rajkot involving a distance of 26 kms for a lump sum price of Rs.48,11,73,000/-payable by EPIL to the original petitioner under a sub-contract. 2.3. According to the original petitioner, the said work orders/contracts were “Engineering, Procurement and Commissioning” contracts on EPC/Turnkey basis. According to the original petitioner, as per the terms of the contracts, the petitioners were required to design and build all works under the contracts as per the prescribed specifications and operate and maintain the projects on completion for a period of two years. According to the petitioner, the scope of the works included designing, engineering, procuring, constructing, completing, commissioning operating and maintaining the whole of the said works for two years from the date of commissioning. According to the petitioner, amongst other things, the contracts stipulated that the pipe material shall consist of mild steel pipe, made of mild steel confirming to BIS2062 Grade” B” Fe 410 or spirally welded or longitudinally welded pipes confirming to BIS2589 and that the price of Mild Steel Plats/H.R.Coils to remain firm and fixed during the contracted periods. 2.4. It appears that on or about 4.6.2002, the original petitioner applied to the Assistant Sales Tax Commissioner, Rajkot, for issuance of two, “No TDS Certificates”, one in respect of NC6 and NC7 and another in respect of NC12 as provided in Section 57B(4)(a) of the Gujarat Sales Tax Act (hereinafter referred to as the “Act”) on the ground that it is not liable to pay any sales tax in respect of the said works. In support of the said application, the petitioner furnished to the Assistant Commissioner a copy of each of the three works. Pursuant to the said applications, the Assistant Commissioner of Sales Tax issued two “No TDS Certificates” both dated 28.06.2002, one in respect of NC6 and NC7 and another in respect of NC12 under Section 57B(4) of the Act and held that original petitioner would not be liable to pay any sales tax inspite of the aforesaid two Works involved in the execution of the aforesaid work contracts. 2.5. It was the case on behalf of the petitioner that for execution of the works involved in the aforesaid work orders, the petitioner required steel plates of stipulated and approved quality for converting them into steel pipes under the supervision and direction of the Board. 2.5. It was the case on behalf of the petitioner that for execution of the works involved in the aforesaid work orders, the petitioner required steel plates of stipulated and approved quality for converting them into steel pipes under the supervision and direction of the Board. According to the petitioner, the petitioner started executing the works and all the steel pipes required under the contracts were purchased by the petitioner from Essar Steel Limited which was one of the approved suppliers of the Board. That M/s. Essar Steel Limited was also registered dealer under the Act and was enjoying sales tax exemption incentives under Entries 118 and 255 of the Notifications issued under Section 49(2) of the Act. According to the petitioner, upon taking delivery of steel plates from Essar Steel Limited, the petitioner got them converted into steel pipes as per the specifications and direction of the Board of by awarding job works for fabrication and payments for the plates and job work charges for fabrication were made directly by the Board to M/s. Essar Steel Limited and to the concerned job workers. 2.6. That according to the petitioner, the petitioner filed at regular intervals of time, sales tax returns with the jurisdictional Sales Tax Officer along with the details of R.A. Bills raised on the Board and EPIL for the contracts executed by it. The petitioner claimed exemption from payment of sales tax in respect of resale of steel plates used in the execution of the works as was admissible under Entries Nos. 119 and 255(4) of the Notifications issued under Section 49(2) of the Act. The petitioner was thereafter assessed by the jurisdictional Sales Tax Officers, Morbi wherein it was accepted that the petitioner had resold steel plates purchased by it from Essar Steel Limited and therefore, in the Assessment Orders, both dated 19.07.2005, no sales tax was imposed in respect of such resale of goods. 2.7. The petitioner was thereafter assessed by the jurisdictional Sales Tax Officers, Morbi wherein it was accepted that the petitioner had resold steel plates purchased by it from Essar Steel Limited and therefore, in the Assessment Orders, both dated 19.07.2005, no sales tax was imposed in respect of such resale of goods. 2.7. It appears that thereafter and after the assessment orders were so passed by the jurisdictional Sales Tax Officer, Morbi, it was noticed by the Corporate Cell working in the Commissioner's office that an irregularity was committed in the assessment orders by allowing resale deductions to the petitioner, the Commissioner of Sales Tax, therefore, transferred the revision proceedings from the Deputy Commissioner of Rajkot to the Deputy Commissioner of Sales Tax of Corporate Cell-2 by passing an order under Section 82 of the Act. That thereafter, the Deputy Commissioner of Sales Tax, (Corporate Cell-2) issued notice under Section 67 of the Act proposing to revise the assessment orders dated 19.07.2005 on the ground that the petitioner has sold steel pipes which is exigible to sales tax. That in response to the said notice, the petitioner filed its reply vide its reply dated 16.11.2005, objecting to the passing of the orders as proposed in the said notices. Simultaneously, the petitioner also preferred Special Civil Application No. 156 of 2006 before this Court challenging the proceedings before the Deputy Commissioner. That during the pendency of the petition before this Court, the Deputy Commissioner passed orders dated 31.12.2005 demanding sales tax interest and penalty thereon from the petitioner on the premise that the petitioner has sold the steel pipes which is exigible to sales tax. That by order dated 06.02.2006, this Court allowed the aforesaid Special Civil Application, quashed and set aside the order dated 31.12.2005 and directed the Deputy Commissioner to decide the issue afresh after giving an opportunity of hearing to the petitioner with a corresponding direction to the petitioner to submit its reply within the time limit stipulated in the judgment. It appears that thereafter the petitioner gave detailed written submissions to the Deputy Commissioner and requested him to drop the revision proceedings. 2.8. It appears that thereafter the petitioner gave detailed written submissions to the Deputy Commissioner and requested him to drop the revision proceedings. 2.8. The Deputy Commissioner, however, rejected the submission made before him and passed the orders dated 31.3.2006 confirming his earlier decisions and levying tax, penalty and interest holding that the petitioner had sold the pipes and not plates and since pipe is a commodity different from plate, the petitioner is not entitled to deduction of resale as was allowed in the assessment proceedings. That by the aforesaid orders dated 31.3.2006, the Deputy Commissioner raised the following demands: Particulars 19.7.2001 to 31.3.2002 1.4.2002 to 30.06.2002 Tax 4,82,90,053/ 51,12,103/ Penalty u/s 45(6) 2,89,74,032/ 46,00,893/ Interest u/s. 47(4A) 2,60,76,629/ 27,58,140/ Total 10,33,40,714/ 1,24,71,136/ Paid dues as per Original A.O 8,94,127 3,87,297/- Outstanding 10,24,46,587/- 1,20,83,839/- 2.9. Feeling aggrieved and dissatisfied with the aforesaid order dated 31.03.2006 and demanding of tax, interest and penalty, the petitioner preferred revision applications under Section 67 of the Act before the learned Tribunal. By the impugned judgment and order dated 4.10.2006, the learned Tribunal dismissed the said revision application and confirmed the orders passed by the Deputy Commissioner dated 31.3.2006. 2.10. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Tribunal dated 4.10.2006 passed in Revision Application Nos. 35 & 36 of 2006 confirming the demand raised by the Deputy Commissioner in the orders dated 31.12.2005/31.3.2006, the original petitioner M/s. Essar Construction Limited had preferred the present Special Civil Application. That in view of the change in the name of original petitioner, pursuant to the order passed by this Court passed in Civil Application No.4923 of 2015, Essar Projects (India) Limited is permitted to substitute as original petitioner in place of Essar Construction Limited. 3. Shri S.N. Soparkar, learned Senior Advocate has appeared on behalf of the petitioner and Ms. Manisha Lavkumar, Government Pleader has appeared with Shri Hardik Vora, learned Assistant Government Pleader on behalf of the respondent State. 4. 3. Shri S.N. Soparkar, learned Senior Advocate has appeared on behalf of the petitioner and Ms. Manisha Lavkumar, Government Pleader has appeared with Shri Hardik Vora, learned Assistant Government Pleader on behalf of the respondent State. 4. Shri S.N. Soparkar, learned counsel for the petitioner has vehemently submitted that in the facts and circumstance of the case both learned Tribunal as well as Deputy Commissioner have erred both in law and on facts in raising demand of tax, interest and penalty by holding that the petitioner has sold pipes and not plates and since pipe is a commodity different from plate, the petitioner is not entitled to deduction of resale as was allowed in the assessment order. 4.1. It is further submitted that while holding the above the Deputy Commissioner as well as learned Tribunal have failed to appreciate the nature of contracts and the works undertaken there under. On the issue of nature of contract, it is vehemently submitted by Shri S.N. Soparkar, learned counsel for the petitioner that a term of contract clearly indicates that the contract was in the nature of an indivisible works contract i.e. Engineering, Procurement and Commissioning (EPC) contract, where, the petitioner was required to design, engineer, procure, construct, complete, commission and operate the whole system of pipeline works for 2 years for a lump sum amount of approximately Rs.95 Crores. It is submitted that the contract further specifically contemplated the fixed price for the steel that was to be procured for the purpose of execution of the contract. It is submitted that extent of work in the bid document also indicates that the contract was in the nature of work contract. In support of his above submission that the contract was in the nature of works contract, Shri Soparkar, learned counsel for the petitioner has relied upon relevant clauses of the contract viz. clause, 2,3,4,5 (5.3. 5.6), 6, (6.1, 6.3, 6.5 and 6.6.5) 7, 7.2, 9, 10 and 11 of the contract. 4.2. It is further submitted by Shri Soparkar, learned counsel for the petitioner that pipes were to be constructed as per the specifications laid out in the contract (clause 8.5, 8.5.1.1, 8.5.2.1, 8.5.2.3, 8.5.3, 8.5.4, 8.7.1 and 8.10.2.4) and the payment for such pipes was made directly to the plate suppliers and job manufacturers by Board. 4.3. 4.2. It is further submitted by Shri Soparkar, learned counsel for the petitioner that pipes were to be constructed as per the specifications laid out in the contract (clause 8.5, 8.5.1.1, 8.5.2.1, 8.5.2.3, 8.5.3, 8.5.4, 8.7.1 and 8.10.2.4) and the payment for such pipes was made directly to the plate suppliers and job manufacturers by Board. 4.3. It is further submitted by Shri Soparkar, learned counsel for the petitioner that the assessment orders clearly indicate that the Assessing Officer had accepted that the purchase of steel plates is from a registered dealer and therefore, there is no question of there being any “manufacture”. It is submitted that as per Section 2(28) of the Sales Tax Act, the sale occurs when there is transfer of property of goods involved in execution of works contract. It is submitted that as per the settled law, in a works contract property in goods passes when property is incorporated in the contract. In support of his above submission, he has relied upon the decision of the Hon'ble Supreme Court in the case of Builders Association of India vs. Union of India reported in (1989) 2 SCC 645 as well as in the case of M/s. Gannon Dunkererley and co vs. State of Rajasthan reported in (1993) 1 SCC 364 . 4.4. It is further submitted by Shri Soparkar, learned counsel for the petitioner that furthermore, tax on transfer of property in good involved in execution of works contract is not on the basis of form on which the goods pass on to the buyer, but on the value of such goods involved in execution of works. In support of his above submission, he has relied upon the decision in the case of Black Stone Rubber Industries (P) Ltd vs. State of Rajasthan and Another reported in 124 STC 99 (para 27) as well as decision of the Hon'ble Supreme Court in the case of Duni Chand Rataria vs. Bhuwalka Brothers Ltd reported in AIR 1955 SC 182 . It is submitted that transformation of goods from one form to another does not create a new commodity exigible to tax. 4.5. It is submitted that transformation of goods from one form to another does not create a new commodity exigible to tax. 4.5. It is further submitted by Shri Soparkar, learned counsel for the petitioner that in the instant case the steel plates converted into steel pipes are deemed to have been sold at the very time of their incorporation/use in the works contract and therefore, the learned Tribunal has erroneously come to a conclusion that the contract was for sale of steel pipes. It is submitted that the contract contemplate procuring the steel plates and converting them to steel pipes. It is submitted that specifications for both; plates and pipes; have been clearly spelt out. It is submitted that conversion of steel plates into pipes was just one component of the entire EPC contract and therefore, in compliance of the contract, to be undertaken by the petitioner. It is submitted that therefore, when the plates were converted, in compliance of the contractual requirement, to pipes; the property in the goods i.e. steel plates, got incorporated into the works contract, leading to the deemed incidence of sale at that very point. It is submitted that since the benefit of the entry 119 was available to goods which are “resold”, the transfer of the plates into pipes; and resultant incorporation into the works contract; amounts to “resale” directly falling within the parameters of the entry 119/255(4); thereby not attracting tax. 4.6. It is further submitted by Shri Soparkar, learned counsel for the petitioner that even levy of the penalty by the Deputy Commissioner confirmed by the learned Tribunal is absolutely illegal. It is submitted that the Commissioner has no jurisdiction to levy penalty under Section 45(6) of the Act. It is submitted that on fair reading of Section 45(6) along with Section 45(5), penalty can only be levied in case of assessment under Section 41 of 50 or reassessment under Section 44, because the requirement is that the assessment or reassessment should indicate a higher amount of tax payable by assessee than what has been paid pursuant to self assessment under Section 47. It is submitted that revision under Section 67 of the Act provides for reopening the assessment order of the Assessing Authority after the authority has accepted the self assessment under Section 47. It is submitted that revision under Section 67 of the Act provides for reopening the assessment order of the Assessing Authority after the authority has accepted the self assessment under Section 47. It is submitted that the attempt under Section 67 of the Act is to find, if any, error as been made by the assessing authority and not by the assessee. It is submitted that therefore, the same does not provide for penalty in case of revision under Section 67 of the Act. It is submitted that therefore, the Commissioner had no jurisdiction to levy penalty in revision proceedings under Section 67 of the Act. 4.7. In the alternatively and without prejudice to the above submission, it is submitted by Shri Soparkar, learned counsel for the petitioner that imposition of penalty necessarily involves question of mensrea. It is submitted that the penalty cannot be imposed on a party when there was no intention on the part of such party to evade payment of sales tax. In support of his above submission, Shri Soparkar, learned counsel for the petitioner has relied upon the following decisions: (1). Hindustan Steel Ltd vs. State of Orissa reported in (1969) 2 SCC 627 . (2). Banu Hasim vs. State of Gujarat rendered in Tax Appeal No.1842 of 2010. (3). Hemchandbhai and Co vs. The State of Gujarat rendered in Sales Tax Reference No. 13 of 1979. It is submitted that therefore, the impugned order passed by the Deputy Commissioner confirmed by the learned Tribunal imposing the penalty deserves to be quashed and set aside. 4.8. It is further submitted by Shri Soparkar, learned counsel for the petitioner that even Section 45(6) of the Act sets an outer limit on maximum penalty that can be imposed i.e. the words used in Section 45(6) are “penalty not exceeding one and a half times .....”. It is submitted that therefore, it clearly indicates that the quantum of penalty to be imposed is discretionary in nature and such discretion ought to be exercised reasonably especially considering the facts of the case. It is submitted that in appropriate circumstances, it is possible to not levy penalty at all/levy zero penalty under Section 45(6). It is submitted that therefore, it clearly indicates that the quantum of penalty to be imposed is discretionary in nature and such discretion ought to be exercised reasonably especially considering the facts of the case. It is submitted that in appropriate circumstances, it is possible to not levy penalty at all/levy zero penalty under Section 45(6). In support of his above submission, he has relied upon the order passed by this Court in Tax Appeal No. 255 of 2015 in the case of State of Gujarat vs. TJ Agro Fertilizers Pvt. Ltd, which upheld the view taken by the learned Tribunal taking a view that as the discretion is given to the authorities to levy penalty upto maximum limit of 150% and no minimum penalty is prescribed., if facts of the case so warrant, no penalty can be levied under Section 45(6) of the Act. 4.9. It is further submitted that in the present case (1) the petitioner was issued no TDS certificate under Section 57B(5); (2) Full disclosure was made by the petitioner at the time of original assessment and the STO had accepted the contentions of the petitioner after applying his mind; (3) Determination orders have been passed by the Commissioner under Section 62 of the Act which conveyed a view that the transaction of this nature would be a works contract, not manufacture; (4) It is not even the case of the Revenue that the petitioner had any mens rea and therefore, in the facts and circumstances of the case levy of any penalty under Section 45(6) of the Act is not warranted. 4.10. Shri Soparkar, learned counsel for the petitioner has heavily relied upon the decision of the Hon'ble Supreme Court in the case of Sree Krishna Electricals vs. State of Tamil Nadu reported in (2009) 11 SCC 687 ; decision of the Division Bench of this Court in the case of Hemchandbhai & Co. vs. The State of Gujarat reported in (1982) 50 STC 274 (Guj) as well as decision of the Division Bench of this Court in the case of Banu Hasim vs. State of Gujarat rendered in Tax Appeal No.1842 of 2010 as well as observations made by the Division Bench of this Court in the case of State of Gujarat vs. Esdee Paints Ltd rendered in Civil Application (OJ) No. 224 of 2015. In support of above submission that in the facts and circumstances of the case narrated herein above and in absence of any mens rea on the part of the original petitioner, the penalty is not warranted. Making above submissions and relying upon the above decisions, it is requested allow the present petition and quash and set aside the impugned orders passed by the Deputy Commissioner dated 31.3.2006 and the impugned judgment and order passed by the learned Tribunal dated 4.10.2006 by holding that levy of penalty and interest on the transaction/works contract is bad in law. 5. Present petition is vehemently opposed by Ms. Manisha Lavkumar, learned Government Pleader with Shri Hardik Vora, learned Assistant Government Pleader appearing on behalf of the respondent State. 5.1. It is vehemently submitted by Ms. Manisha Lavkumar, learned Government Pleader that in the facts and circumstances of the case, the learned Tribunal has rightly dismissed the revision application preferred by the petitioner and has rightly confirmed the levy of tax, penalty and interest imposed by the Deputy Commissioner. 5.2. It is further submitted by Ms. Manisha Lavkumar, learned Government Pleader that in the facts and circumstances of the case and considering the material on record and various clauses of contract, the learned Tribunal has rightly observed and held that the contract entered into by the petitioner with the Board as well as with EPIL was a contract for sale and supply of pipes and therefore, the property in pipes has passed from the petitioner to the Board and that the petitioner never become owner of the property in steel plates at any point of time and therefore, the department was justified in holding that there was transfer of property in pipes from the petitioner to the Board and therefore, it amounted to a sale and once it amounted to a sale, it was liable to be taxed in accordance with law. 5.3. It is further submitted by Ms. Manisha Lavkumar, learned Government Pleader that on appreciation of material on record and the statement made on behalf of the respective parties, the learned Tribunal has rightly not accepted the submission on behalf of the petitioner that the parties had intention to enter into a contract of sale and supply of still plates. It is submitted that the Board as well as EOIL were never interested in purchasing iron sheets. It is submitted that the Board as well as EOIL were never interested in purchasing iron sheets. Otherwise, they would have been directly entered into a contract of purchase of steel plates directly with the dealers and suppliers of iron sheets. 5.4. It is further submitted by Ms. Manisha Lavkumar, learned Government Pleader that even impugned levy of tax on supply of steel pipes for execution of the works contract is rightly held to be sale and supply to levy of tax in view of Article 366(29A) of the Constitution of India r/w Section 2(28) of the Gujarat Sales Tax Act. 5.5. It is further submitted by Ms. Manisha Lavkumar, learned Government Pleader that in fact what was supplied was the steel pipes and were not steel plates as contended on behalf of the petitioner. It is submitted that supply of steel pipes cannot be said to be "resale" within the definition of Section 2(26) of the Act as contended on behalf of the petitioner. It is submitted that in the present case the petitioner in fact purchased the steel plates and they manufactured the steel pipes out of the aforesaid steel plates and thereafter, it is used in process of work contract. It is further submitted that even by raising invoices, the petitioner charged separate price for steel pipes. It is submitted that petitioner purchased the steel plates from the Essar Steel and thereafter the petitioner converted and manufactured the steel plates into steel pipes on job works and for which the petitioner made separate demand. It is further submitted that in fact what is provided in the contract was the specification of steel plates and it cannot be said to be a contract for supply of steel plates. It is further submitted that even the mode of payment to Essar Steel Limited directly by the Board was an internal arrangement for their internal convenience and it cannot be said that there was a contract of supply of steel plates between the petitioner and the Board as sought to be contended on behalf of the petitioner. It is submitted that merely because under the contract some specifications of steel plates were provided, it cannot be said that there was a contract for supply of steel plates between the petitioner and the Board as sought to be contended on behalf of the petitioner. 5.7. It is further submitted by Ms. It is submitted that merely because under the contract some specifications of steel plates were provided, it cannot be said that there was a contract for supply of steel plates between the petitioner and the Board as sought to be contended on behalf of the petitioner. 5.7. It is further submitted by Ms. Manisha Lavkumar, learned Government Pleader that substance and not form of contract is to be considered. 5.8. Ms. Manisha Lavkumar, learned Government Pleader has submitted that in the present case what is purchased by the petitioner from the Essar Steel Limited is steel plates and thereafter the same is converted into steel pipes by manufacturing altogether a new item steel pipes which is manufactured by the petitioner through job work and thereafter the same is sold/used for carrying out works contract, same can be said to be manufactured and thereafter sale of altogether a new item i.e. steel pipes which is subjected to levy of tax. In support of her above submission, she has heavily relied upon the decision of the Hon'ble Supreme Court in the case of State of Tamil Nadu vs. M/s. Pyare Lal Malhotra and ors reported in (1976) 1 SCC 834 and Income Tax Officer, Udaipur vs. Arihant Tiles and Marbles Pvt. Ltd reported in (2010) 2 SCC 699 . 5.9. Ms. Manisha Lavkumar, learned Government Pleader has also heavily relied upon the decision of the Hon'ble Supreme Court in the case of Larsen And Tourbo Limited & Anr vs. State of Karnataka and Anr. reported in (2014) 1 SCC 708 as well as Article 366(29A) in support of her submission that in the facts and circumstances of the case and considering the material on record, the learned Tribunal has rightly held that supply of steel pipes for execution of works contract between the petitioner and the Board is subjected to levy of tax as same can be said to be sale within the definition of Section 2(28) of the Sales Tax Act and it cannot be said to be resale as contended on behalf of the petitioner. 5.10. Now, so far as levy of penalty is concerned, it is submitted by Ms. Manisha Lavkumar, learned Government Pleader that same is absolutely in consonance with the provisions of the Act and therefore, the same does not require any interference of this Court. 5.10. Now, so far as levy of penalty is concerned, it is submitted by Ms. Manisha Lavkumar, learned Government Pleader that same is absolutely in consonance with the provisions of the Act and therefore, the same does not require any interference of this Court. Making above submissions and relying upon the above decisions, it is requested to dismiss the present petition. 6. Heard the learned counsel for the respective parties at length. From the facts narrated herein above and the material on record, it appears that the petitioner herein was awarded three EPC contracts wherein the petitioner was required to design, engineer, procure, construct, complete, commission and operate the whole system of pipeline. The works contracts were obtained as such in the name of M/s. Essar Projects India Limited but they were subsequently transferred to petitioner by M/s. Essar Projects Limited. In the above contract, the petitioner contractor was required to lay pipelines between Morbi and Maliya in Rajkot District covering a distance of 26 kms. The second part of the contract was to cover an area between Morbi and Tankara in Rajkot District covering a distance of 36 kms. The third one was for laying pipeline from Tankara to Gauriadad in Rajkot District covering a distance of 26 kms. The payment in respect of the first two contracts were required to be made by the Board and the payment in respect of the third part of the contract was required to be made by EPIL. At this state, it is required to be noted that as per the terms and conditions and while laying down steel pipes, the contract was required to use/supply the steel pipes on a particular quality, particular size and particular diameter. Even steel pipes were required to be purchased from the particular manufacturers or vendors only. Even the thickness of the steel plates to be used for the manufacture of pipes was also agreed upon between the parties. Even the pipes required to be installed were of a particular diameter. Therefore, the petitioner herein as such purchased the steel plates from Essar Steel Limited, Hajira. At this stage, it is required to be noted that Essar Steel Limited did not required the tax from the petitioner since Essar Steel Limited was enjoying sales tax exemption incentives under Entries 118 and 255 of the notifications issued under Section 29(2) of the Act. At this stage, it is required to be noted that Essar Steel Limited did not required the tax from the petitioner since Essar Steel Limited was enjoying sales tax exemption incentives under Entries 118 and 255 of the notifications issued under Section 29(2) of the Act. It appears that after purchase of steel plates from Ms. Essar Steel Limited, petitioner got them fabricated into steel pipes through third party and by getting it done through job work thereafter used in the aforesaid works contract of laying pipelines for the Board. By the impugned order, the Revisional Authority and the learned Tribunal have held that the petitioner is liable to pay tax under the Act on manufacture and supply of steel plates. It is the case on behalf of the petitioner that the works contracts were indivisible work contracts and the steel plates were as such used in execution of the works contract and therefore, the said transaction cannot be "sale" within the meaning of Section 2(28) of the Act. It is also the case on behalf of the petitioner that in order to constitute a transaction as amounting to sale in the execution of works contract there should be a transfer of property in goods at the time involvement of the goods belonging to the contractor in the course of the execution of the works contract. Therefore, it is the case on behalf of the petitioner that at the time when the work contract was executed the property in the goods belonging to the petitioner passed to the customer. It is also the case on behalf of the petitioner that a defined in Section 2(28)(c) of the Act, there should be "transfer of property in goods involved in the execution of works contract". Therefore, it is the case on behalf of the petitioner that it can be said to be case of resale and therefore, as the steel plates are used in execution of the work contracts and therefore, they are sold and hence, the claim of resale deduction is admissible to the petitioner. 6.1. However, it is the case on behalf of the State authority that as such there was no contract between the petitioner contractor and the Board for supply of steel plates. 6.1. However, it is the case on behalf of the State authority that as such there was no contract between the petitioner contractor and the Board for supply of steel plates. It is the case on behalf of the respondent State that after the petitioner contractor purchased steel plates they themselves have manufactured altogether a new item/goods steel pipes by the help of third parties and by getting the same done through job work for which the payment is made by them. Therefore, it is the case on behalf of the State authority that the said transaction can be said to be sale within the definition of Section 2(28) of the Act and therefore, the petitioner is liable to pay tax on the same. It is the case on behalf of the State authority that merely because steel pipes were required to be used of a particular brand/company and/or specification mentioned in the works contract/contract it cannot be said that there was a contract for sale of steel plates between the petitioner contractor and the Board. 7. Therefore, the short question which is posed for the consideration of this Court is whether was there any contract for supply/sale of steel plates between the petitioner contractor and the Board and/or whether transaction of supply and sale of steel pipes used in execution of work contracts can be said to be sale within the definition of Section 2(28) of the Act or whether the same can be said to be resale as contended on behalf of the petitioner-contractor? 7.1. Having heard the learned counsel for the respective parties at length and considering the works contract, it cannot be said that there was any contract between the petitioner contractor and the Board for supply of steel plates. From the material on record, it appears that the petitioner had purchased the steel plates from M/s. Essar Steel Limited and M/s. Essar Steel Limited did not required tax from the petitioner as M/s. Essar Steel Limited was enjoying exemption under Section 49(2) of the Act. It also further appears from the material on record that after the steel plates were purchased from M/s. Essar Steel Limited, the petitioner contractor converted it into altogether a new item/steel pipes after getting it done through job work. It also further appears from the material on record that after the steel plates were purchased from M/s. Essar Steel Limited, the petitioner contractor converted it into altogether a new item/steel pipes after getting it done through job work. Whether such transaction can be said to be manufacture of altogether new item and steel pipes or not is required to be considered while considering the fact that by a different process and getting work done through job work, the steel plates are converted into steel pipes. Whether such transaction can be said to be manufactured or not, few decisions of the Hon'ble Supreme Court are required to be considered. In the case of M/s. Pyare Lal Malhotra and Ors (supra), in para 14, the Hon'ble Supreme Court has observed and held as under: It is true that the question whether goods to be taxed have been subjected to a manufacturing process so as to produce a new market able commodity, is the decisive test in determining whether an excise duty is leviable or not on certain goods. No doubt, in the law dealing with the sales tax, the taxable event is the sale and not the manufacture of goods. Nevertheless, if the question is whether a new commercial commodity has come into existence or not, so that its sale is a new taxable event, in the Sales’ Tax law, it may also become necessary to consider whether a manufacturing process, which has altered the identity of the commercial commodity, has taken place. The law of sale tax is also concerned with “goods” of various descriptions. It, therefore, becomes necessary to determine when they cease to be goods of one taxable description and become those of a commercially different category and description. 7.2. In the case of Arihant Tiles and Marbles Private Limited (supra) in para 20, the Hon'ble Supreme Court has observed and held as under: “Applying the above tests laid down by this Court in Budharaja’s case (supra) to the facts of the present cases, we are of the view that blocks converted into polished slabs and tiles after undergoing the process indicated above certainly results in emergence of a new and distinct commodity. The original block does not remain the marble block, it becomes a slab or tile. The original block does not remain the marble block, it becomes a slab or tile. In the circumstances, not only there is manufacture but also an activity which is something beyond manufacture and which brings a new product into existence and, therefore, on the facts of these cases, we are of the view that the High Court was right in coming to the conclusion that the activity undertaken by the respondents assessees did constitute manufacture or production in terms of Section 80IA of the Income Tax Act, 1961. 7.3. Thus, the steel plates converted into steel pipes after undergoing process by the job worker/third parties certainly results in emergence of a new and distinct commodity viz. steel pipes. The original plates does not remain the original plates. It becomes a steel pipes. Thus, in the circumstances, not only there is manufacture but also an activity which is something beyond manufacture and which brings a new product into existence and thereafter steel pipes are supplied, it amounts to "sale" within the definition of Section 2(28) of the Act. Section 2(28) of the Act, reads as under: 2(28): Sales means a sale of goods made within the state for cash or deferred payment or other valuable consideration and includes” (a) any supply by a society or club or an association to its members on payment of a price or of fees or subscription; (b) transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration, (c) transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract, (d). delivery of goods, on hire purchase or any system of payment by installments, (e). supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration, (f). supply by way of or as part of any service or in any other manner whatsoever, of goods being food or any other article for human consumption or any drink (whether or not intoxicating)where such supply or service is for cash, deferred payment or other valuable consideration, but does not include a mortgage, hypothecation, charge or pledge and the words “sell”, “buy” and “purchase” with all their grammatical variations and cognate expressions shall be construed accordingly. 7.4. 7.4. It is the case on behalf of the petitioner that steel plates were used cannot be accepted as what is used in execution of the works contract is a steel pipes which is altogether a new product/item and not steel plates as contended on behalf of the petitioner. 7.5. The contention on behalf of the petitioner that in the works contract, it has been specifically provided that the steel pipes were required to be purchased from the particular manufacturer and that thickness of the steel plates to be used for the manufacturer of pipes was also agreed upon between the parties and even the pipes required to be installed were of a particular diameter and that even the payment was made to M/s. Essar Steel Limited directly by the Board is concerned, the aforesaid is neither here nor there. Merely because in the contract for laying down pipelines, a particular quality and/or thickness of the steel plates were agreed to be used and/or even the steel plates were required to be purchased from the particular manufacturer, it cannot be said that there was a contract for supply/sale of steel plates as contended on behalf of the petitioner. As such there is no contract at all for sale/supply of steel plates by the petitioner contractor and the Board. Even the submission on behalf of the petitioner that the payment of steel plates were directly made by the Board to the Essar Steel Limited and therefore, it can be said that there was a contract for sale of steel plates is concerned, the aforesaid has no substance. It appears that there was an internal arrangement between the Board and the petitioner contractor and the Essar Steel Limited and it was agreed that whatever amount of steel plates to be paid by the petitioner contractor to the Essar Steel Limited was to be made out of the payment to be made by the Board to the petitioner-contractor. The aforesaid is evident from the correspondences at pages 217 and 218. By the aforesaid, it cannot be said that there was any contract of supply/sale of steel plates by and between the petitioner contractor and the Board. The steel plates are purchased by the petitioner and they manufactured the steel pipes out of steel plates and thereafter same is used in the process of works contract. By the aforesaid, it cannot be said that there was any contract of supply/sale of steel plates by and between the petitioner contractor and the Board. The steel plates are purchased by the petitioner and they manufactured the steel pipes out of steel plates and thereafter same is used in the process of works contract. At this stage, it is required to be noted that bid was a lump sum bid for design, engineering, procurement, construction, testing, commissioning and operation and maintenance contract for Pumped Water Supply Scheme and as per price schedule-A, bidder shall quote his lump sum price for entire work with break up for items listed in the schedule. Prices quoted in Schedule A only will be considered for price evaluation and shall form a part of the contract agreement. As per price schedule, Rs.77,90,662/-was for Mild Steel Pipeline of specific diameter and shell thickness etc. Considering the aforesaid facts and circumstances, it cannot be said that there was contract for supply of steel plates and steel plates were used for execution of the works contract as contended on behalf of the petitioner. As observed herein above, after purchase of the steel plates from M/s. Essar Steel Limited, the petitioner – contractor has converted/manufactured the same into steel pipes on getting work done through job work and steel pipes are used in execution of work. Therefore, the same would attract sale within the definition of Section 2(28) of the Act as contended on behalf of the State, for which, the petitioner is liable to pay tax under the Act. The contention on behalf of the petitioner that it can be said to be resale and therefore, the claim of resale deduction is admissible to the petitioner, cannot be accepted. 7.6. It also appears from the record that the petitioner entered into separate work contract for manufacturing of pipes on the steel plates. It had nothing to do with the that part of the sub contract. The contracts were for supply and laying of pipeline and not for supply steel plates, as rightly observed by the learned Tribunal. As the contracts were for huge amount and money was given from the public exchequer, in order to maintain quality certain conditions were required to be made including providing specification of steel plates to be used in supply/laying down of steel pipes. As the contracts were for huge amount and money was given from the public exchequer, in order to maintain quality certain conditions were required to be made including providing specification of steel plates to be used in supply/laying down of steel pipes. The steel plates were required to be used for preparing and producing pipes. Therefore, it was necessary to state in the contract as to the quality of steel plates to be used in the performance of the work contract and the companies from which steel plates were required to be purchased. Thus, the quality of goods were required for ensuring that there should be quality work for quality payment. Merely insisting for quality work with specification, it cannot be said that there was any contract for supply/sale of steel plates. Considering the aforesaid facts and circumstances of the case, we are of the opinion that as such learned Tribunal has not committed any error in confirming the order passed by the Revisional Authority and holding that the petitioner company-contractor is liable to pay tax under the Act on manufacture and supply of steel pipes. We are in complete agreement with the view taken by the learned Tribunal. 8. Now, so far as submission on behalf of the petitioner on the penalty imposed under Section 45(6) of the Act is concerned, it cannot be disputed that the petitioner dealer is deemed to have been failed to pay the tax as provided under subsection(5) of Section 45 of the Act. Under the circumstances, when the petitioner dealer is deemed to have failed to pay tax to the extent mentioned in subsection(5) of Section 45, the petitioner is liable to pay penalty. It is the case on behalf of the petitioner that as there was no mens rea in not paying the tax and the petitioner was under bona fide belief that it is not liable to pay tax on the transaction in question levy of penalty under Section 45(6) of the Act is not warranted. However, as rightly observed by the learned Tribunal that there is no material to suggest that the petitioner had consulted any expert opinion on the subject matter in dispute. The petitioner did not also apply for the determination order under Section 62 of the Act. However, as rightly observed by the learned Tribunal that there is no material to suggest that the petitioner had consulted any expert opinion on the subject matter in dispute. The petitioner did not also apply for the determination order under Section 62 of the Act. As rightly observed by the learned Tribunal that there is no material on record or even any previous determination order on the issue which could prompt the petitioner to have belief that it will not be required to pay tax at enhanced rate. On what basis and/or material, the applicant bonafide belief that it is not liable to pay tax on the transaction in question. All throughout an attempt was made to see that tax is not paid contending inter alia that steel pipes were not transferred to contractee and therefore, the transaction did not amount to a sale. It is required to be noted that even thereafter also all throughout the petitioner continued not to pay tax. Under the circumstances and in the facts and circumstances of the case, no error has been committed in imposing the penalty. Under the circumstances, decision relied upon by the learned counsel for the petitioner referred to herein above shall not be applicable to the facts of the case on hand. Under the circumstances and in the facts and circumstances of the case narrated herein above, the order passed by the Revisional Authority imposing the penalty confirmed by the learned Tribunal is not required to be interfered with by this Court. 9. In view of the above and for the reasons stated above, present petition deserves to be dismissed and is accordingly dismissed. Rule is discharged. No costs.