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2016 (4) TMI 534 - SC - VAT and Sales TaxValidity of High Court order - reversed the order of the VAT Tribunal and of other lower authorities on the basis of its conclusion that the inter-State movement of goods was in pursuance of and incidental to the contract for the supply of goods used in the execution of the works contract between the respondent-assessee and the DMRC. The High Court further came to hold that claimed sales should be deemed to have taken place in course of imports of the goods or inter-state trade and that such import/movement of goods was integrally connected with the contract for their supply to DMRC. On the basis of such twin findings the High Court has held that the transactions constituting inter-State trade and those constituting sale or purchase in the course of import were covered by Section 3(a) and Section 5(2) respectively of the CST Act, 1956 and, therefore, exempt from taxation under the DVAT Act, 2004. Held that:- there was no attempt to assail the aforesaid features and to even remotely suggest any factual error on the part of the High Court in noting those features. The salient features flowing out as conditions in the contract and the entire conspectus of law on the issues as notice earlier, leave us with no option but to hold that the movement of goods by way of imports or by way of inter-state trade in this case was in pursuance of the conditions and/or as an incident of the contract between the assessee and DMRC. The goods were of specific quality and description for being used in the works contract awarded on turn key basis to the assessee and there was no possibility of such goods being diverted by the assessee for any other purpose. Hence the law laid down in M/s. K.G. Khosla & Co. v. Deputy Commissioner of Commercial Taxes, Madras [1966 (1) TMI 54 - SUPREME COURT OF INDIA] has rightly been applied to this case by the High Court. Therefore, no reasons found to take a different view. - Apex Court decided against the revenue
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