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2010 (7) TMI 174 - HC - VAT and Sales TaxSales Tax - Providing food in trains is pure sale of goods - constitutional right of the State Government to levy VAT - Commissioner of Value Added Tax held that VAT was payable on the services provided on board the trains, since it amounted to sale within the meaning of Section 2(zc)(vii) of the Act. He also took the view that there were three transactions of sale, one from the licensee contractor to the petitioner, the second from the petitioner to the Railways and the third from the Railways to the passengers. - Held that: - the State is competent to levy sales tax/Value Added Tax on the entire sale consideration in respect of sale of goods and we cannot deny the constitutional right to State to levy such a tax merely because tax authorities have also collected service tax from the petitioner on the assumption that the contract between the parties was a contract of providing services or a composite agreement of providing services and goods. the transaction between the petitioner and Indian Railways does not amount to a contract of providing outdoor catering, but, is a transaction of sale of food and beverages by the petitioner-company to Indian Railways. the transaction between the petitioner-company and Indian Railways for providing food and beverages to the passengers, on board the trains, is a transaction of sale of goods by the petitioner-company to Indian Railways. It is neither a contract for providing services nor a composite contract for supply of goods and providing of services. We also hold that sale in respect of goods loaded on board the trains in Delhi, takes place, when the goods are loaded in the trains.
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