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2012 (3) TMI 388 - MADRAS HIGH COURTWhether the exchange of a defective compressor with a reconditioned compressor along with receipt of repair charges will amount to a transaction of deemed sale under section 3B of the Tamil Nadu General Sales Tax Act, 1959? Whether in the absence of any 'taxable event', in the State of Tamil Nadu is the Tribunal justified in affirming the levy of tax on the transactions relating to mere 'exchange' which are outside the purview of levy of sales tax? Held that:- Whole transaction forms part of an implied contract for repair of the defective compressor in the State. It is only a replacement with a re-conditioned compressor of the same model instead of a defective compressor. Therefore, the authorities below are correct in coming to the conclusion that there is no contract for sale of compressors. Therefore, the transaction has to be treated only as works contract. After considering the nature of the transaction, all the authorities have given a categorical finding that there is a works contract and the transfer of property acquired within the State in the said contract. Further the authorities below are correct in holding that in the absence of separate particulars towards labour charges and the value of property transferred, the provisions of section 3B of the Act were attracted and allowed 30 per cent deduction towards labour charges and only the remaining turnover was chargeable to tax at the appropriate rate. The concurrent findings given by the authorities below are based on valid materials and there is no error or illegality in the order of the Tribunal warranting interference. Thus answer the questions of law as against the assessee and in favour of the Revenue.
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