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2021 (9) TMI 827 - HC - VAT and Sales TaxInter state sale or Intra-state sale - elevators are sold to the contractees - petitioner would procure peripheral machinery and use further manpower for installation purpose on which it would pay VAT - AO was of the opinion that even on the cost of elevators the petitioner must pay the local taxes - HELD THAT:- The Assessing Officer and the revisional authority have made a serious error in demanding VAT from the petitioner on sale and supply of the elevators to its contractees. In plain terms, the machinery was supplied separately by way of a sale which was in the nature of an inter-state sale and on which applicable Central Sales Tax was paid. When the petitioner undertook the work of installation of such machinery and commissioning of the project, the petitioner could be charged only on the incremental value where the local sale took place. The sale of elevators cannot be by any standard treated as a local sale. The Assessing Officer devised an artificial means to tax the same under TVAT Act by suggesting that the petitioner had a local registration and in the course of execution of the work of installation and commissioning of elevators, the petitioner could have brought the machinery from outside and implemented the contract. If we understand correctly what the Assessing Officer is trying to convey is that had the petitioner from its branch offices brought the machinery within the State and thereafter transferred the title in the goods into the contractees, the same would have amounted to local sale and, therefore, local VAT would have been applicable. This is not a matter of desire of the Assessing Officer where the sale should take place so that the same would be inter-state sale or intrastate sale - the Assessing Officer by way of artificial means tried to tax the same transaction again as a local sale demanding VAT which was wholly impermissible. Impugned order of assessment is set aside - revision petition allowed.
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