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2017 (2) TMI 1365 - HC - VAT and Sales TaxExemption certificate in Form WT-1 - Works contract or Sale? - fabrication of super luxury bus bodies on the chassis allocated by the Corporation - assessee claims that it falls in Sl. No.4 where rate of exemption fee was highest i.e. 3.00% of the total value of contract. Held that:- The Apex court in the case of Kone Elevator of India Pvt. Ltd. v. State of Tamil Nadu (5 judges) [2014 (5) TMI 265 - SUPREME COURT] affirmed the judgment in the case of Larsen & Toubro Ltd. v State of Karnataka [2013 (9) TMI 853 - SUPREME COURT], and held that the judgment in the case of State of A.P. v. Kone Elevators (India) Ltd [2005 (2) TMI 519 - SUPREME COURT OF INDIA] does not lay down the correct law and, therefore, was overruled. Thus, the judgment in the case of Kone Elevator of India Pvt. Ltd. v. State of Tamil Nadu of 2014, governs the case at hand and being latest and of Five Judges Bench, holds the field and the other judgments relied upon by both the learned counsel, are not required to be referred. The assessee has indeed justified in claiming that it is a works contract and not a sale as held by the lower authorities, including the Tax Board - it does not materially make any difference if the assessee did not get the body or chassis insured as raised by the learned counsel for the Revenue, particularly when it is admitted that the chassis was duly insured. The nature of the contract certainly falls within the ambit and definition of “works contract”, as given in sec. 2(44) of the VAT Act, which includes in its ambit “assembling”, “fabrication”, “erection”, “installation”, “fitting out” and it takes in its sweep all genre of works contract and is not to be narrowly construed. Once the characteristics of works contract are met with in a contract entered into between the parties, any additional obligation incorporated in the contract would not change the nature of the contract, like seats or air conditioner system being provided by the awarder APSRTC. The claim of learned counsel for the Revenue that the body has been sold, is not found to be justified - Petition allowed - decided in favor of petitioner.
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