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2013 (7) TMI 301 - HC - VAT and Sales TaxLocal sale or Inter-State sale - CST - Installation of equipment in another State - Whether installation of irrigation system including sprinkler to the farmers of Himachal Pradesh from Haryana is inter-state or intra-state sale - Held that:- The analysis of documents no doubt reveal that the petitioner-Company has brought the goods from Gurgaon (Haryana) to Mandi Branch, in the name of Sub Divisional Soil Conservation Officers Agriculture Department and then supplied / installed the irrigation systems in the fields of different farmers/beneficiaries under the ‘Yojna’ and the petitioner - Company received 80% cost of material as subsidy from the department of Agriculture and 20% cost from farmers / beneficiaries. The petitioner-Company has found to have been charged local taxes from the farmers, as evident from the invoices, which has been issued inclusive of all taxes from the branch office, Mandi. Thus, the petitioner for all purposes is said to have made intra-State sales which is liable to payment of VAT - The transaction in question is intra- State and not inter-State sale - Decided against assessee. Exemption from VAT - Agricultural implement - Manually operated or animal driven - Held that:- through the definition of device, it is an instrument designed to carry out a particular or specific purpose. Sprinkler serves the purpose of sprinkling water so it is a device in that sense - if the hairline difference between the two is ignored then it can be regarded implement & also if it is linked with the purpose it serves i.e. agricultural process - it has a direct nexus with the irrigation process. So it is an agricultural implement - the ‘sprinkler’ is not an agricultural implement nor it is driven manually or by animal - No eligible for exemption - Following decisions of Bharat Engineering & Foundry Works Vs. The U.P. Government [962 (10) TMI 45 - ALLAHABAD HIGH COURT] and Delta Engineering Co. Pvt. Ltd. Vs. Commissioner Income Tax [1963 (4) TMI 49 - ALLAHABAD HIGH COURT] - Decided against assessee. Whether Term and Condition No. 17 of Annexure PC relating to construction of Poly Houses and Installation of Micro Irrigation Systems of Part-A and Part-B of the Pandit Deen Dayal Kisan Bagwan Samridhi Yojana is mandatory or directory - Held that:- petitioner Company itself has entered into the contract with the State Government vide Annexure-PC and has also agreed to obey the terms and conditions of the agreement, moreso, as per condition No.17, the petitioner was not allowed to raise any bill from out of the State. Nothing has been brought on record to show how this condition was directory only. As the petitioner’s allocation of the work of installation of micro irrigation systems under Yojna was subject to such condition. This is mandatory condition. Nothing has been argued or brought on record to show how the petitioner’s right under Article 14, 19(1)(g) and Article 301 of the Constitution is infringed whereas the petitioner Company is legally obliged to make the payment to the State Government - Following decision of Grid Corporation of Orissa Limited & Others versus Eastern Metals and Alloys & Others [2010 (8) TMI 787 - SUPREME COURT] - Decided against assessee.
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