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2019 (2) TMI 1389 - HC - VAT and Sales TaxClassification of the product - 'Substation Equipments' - the equipment installed by the petitioner/company under the contract with its clients Focal Energy Group of Companies as integral and inseparable part of the works contract for erecting and installing the solar power generating system - MP VAT Act - petitioner's contention is that respondent No.1/Commissioner of Commercial Tax has erred in law and facts in passing the impugned order, as the equipments supplied by the petitioner, are part of “Solar Power Generating System” and are covered under entry No.71. Whether item No.10 of entry no. 71 includes the entire set up, which constitutes solar power generating system or not. According to Oxford Dictionary, system means a set of things work together as parts of a mechanism or a interconnecting work? Held that:- The solar power generating system includes all devices or equipments, which are connected or combined together to complete the solar power generating system. If one ingredient is missing, the solar power generating system will not function - thus solar power generating system would necessarily include a substation for evacuation and upliftment of power generated by solar power plants. The Hon'ble Supreme Court in the case of CCE v/s Hewlett Packard India Sales Pvt. Ltd. [2007 (8) TMI 347 - SUPREME COURT OF INDIA] has explained the meaning of word 'System' with reference to operating system of the computer and it has been held that the pre-loaded operating system recorded in the hard drive of the computer is an integral part of the computer, without which, the computer cannot open and work and has been classified as operating system under entry relating to computer itself. Even by taking into account the aforesaid judgment, this Court is of the opinion that power generating system includes all components even the grid/goods related to substation, without which, the system cannot work - Once an exemption has been granted in the matter of Value Added Tax/Entry Tax for setting up solar power based projects, the exemption has to be given in respect of a complete project, as all the equipment used in the project are integral part of the project and even without one of the equipments, the project cannot function. Once the entry includes “Solar Power Project”, all the material equipments used for the purposes of setting up power based project are certainly entitled for grant of exemption. The respondents shall grant exemption under entry No.71 (10) in respect of substation equipment/grid and all other equipments supplied by the petitioner during the course of execution of its works contract, as they form integral part of solar power generating system - petition allowed.
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