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2017 (7) TMI 877 - HC - VAT and Sales TaxLevy of VAT - terminalling services provided to Bharat Petroleum Corporation Limited (BPCL) - this Court is of the view that the third respondent has failed to address the important aspect raised by the petitioner by contending that they having discharged the service tax liability, they cannot be directed to pay VAT for the same transaction - whether the petitioner could be made to suffer two levies, namely, sales tax and service tax? - Held that: - it may be necessary to peruse the circular issued by the Central Board dated 01.08.2002. It appears that the circular was not placed before the Assessing Officer. Nevertheless, the circular throws light as to what would be includable in "storage and warehousing" and it states that service for goods including the liquids and gases would fall within the storage and warehousing. Above all, the legal principle should be taken note of by the third respondent, that is to say that except specific contracts so provided under Article 366(29A), no other contracts can be artificially severed to tax the sale element with respect to the goods as compromised in such composite contracts. The non-exclusivity of the agreement between the petitioner and the BPCL is also a relevant factor which the third respondent has not considered. Furthermore, the installation which have been erected by the petitioner are fixed to the ground and the photographs produced would show that it consists of pipes and cylinders and prima facie, this Court is the view that the finding rendered by the third respondent that it is not a fixed asset like land/building/space appears to be an incorrect finding. Thus, for all the above reasons this Court is of the considered view that the assessment under the said head requires to be re-done taking note of the legal position, circular issue by the Central Board, factual matrix and the non-exclusivity of the agreement between the petitioner and the BPCL and that the petitioner cannot be made to suffer by two levies, namely, sales tax and service tax. The impugned assessment under the head of terminalling service provided to BPCL is set aside and the writ petition is allowed and the matter is remanded to the third respondent to re-do the assessment on the said head - appeal allowed by way of remand.
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