No transfer of property in goods if material gets exhausted/evaporated in execution of works contract :
In Shekhawat Explosives v. State of Rajasthan (2004) 137 STC 326 (Raj HC DB), the dealer had undertaken job of blasting, for which he was using explosives. The explosives got exhausted in the process of execution of works contract. It was held that there is no sale of explosives and sales tax cannot be levied on explosives used in works contract.
In Microcontrol Sterlisation Services v. State of Kerala (2009) 26 VST 213 (Ker HC DB), the assessee was sterlising goods by exposure to ethylene oxide in packaged form and then the gas was released after neutralising. It was held that sales tax is only on value of goods that get transferred from contractor is execution of works contract. Consumables are used up in the process of executing the work. They get used up and there is no transfer of such goods to the customer. Value of such consumables is not taxable under sales tax
.