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2021 (9) TMI 470 - HC - VAT and Sales TaxWorks Contract - intra-State sales - three separate contracts for supply, design and erection of 100 TPD Rotary Kiln - turn over has been assessed under the CST Act - levy of penalty u/s12(5) of the Orissa Sales Tax Act, 1947 - whether the Tribunal erred in treating the transactions as an intra-State sale despite the Petitioner having paid CST on the same transaction? - HELD THAT:- In BHARAT HEAVY ELECTRICALS LIMITED VERSUS UNION OF INDIA AND OTHERS [1996 (4) TMI 419 - SUPREME COURT], the Supreme Court was considering a similar question which arose in the background of Bharat Heavy Electrical Limited (BHEL) being awarded a Letter of Intent (LOI) by the National Aluminium Company Limited (NALCO), Bhubaneswar for setting up of five captive power plants (120 MW each) at its Aluminium smelter complex at Angul, Orissa. Pursuant to the LOI, BHEL instructed its several units in Haridwar, Jhansi, Bhopal, Bangalore, Ramachandrapuram (Andhra Pradesh- near Hyderabad), Ranipet and Tiruchi (Tamil Nadu) and so on to manufacture the requisite machinery and equipment. There was a separate supply and service contract executed between the parties. Merely because the component parts were brought from different places outside Orissa and assembled in Orissa, it cannot be said that it was an intra-State sale and that a colourable device was deployed to avoid paying sales tax under the OST Act. This is contrary to the facts. The documents placed on record clearly show that components either manufactured in the Petitioner’s own facilities outside Orissa or brought from outside Orissa were transported to Orissa for erection, testing and commissioning of the 100 TPD Rotary Kiln - there was no occasion for the Tribunal to have gone into a lengthy discussion whether it amounted to a works contract when the focus ought to have been on whether it was an intra-State sale as contended by the State. The goods were indeed supplied in course of inter-State rate, and received by TRL in Orissa. The movement of the goods originated from outside the State. This was not an intra-Sate sale by any stretch of imagination. The Court is unable to agree with the conclusion reached by the authorities at all levels, i.e., STO, ACST - application disposed off.
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