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2024 (1) TMI 177 - HC - VAT and Sales TaxInter state sale or intra state sale - Validity of directions beyond the scope of the questions framed and referred - goods of special importance under Section 14 of the CST Act - deletion of penalty despite of the fact that the assessee has created documents to convert the local sale into interstate transaction with the intention to evade/avoid tax. Whether the sale of goods involved in the present case were inter-state sales or intra-state sales? HELD THAT:- In the considered opinion of this Court, the RTB, after careful consideration of the entire record, had rightly concluded the contract to be a composite and indivisible EPC works contract on turnkey basis. The observation by the RTB, are in content and form, flawless and thus this Court has no hesitation in affirming the view taken by RTB in this regard. The contract was a composite and indivisible EPC works contract. In the simplest of terms, RVUNL was to receive the final thermal power project which was to be erected by the assessee for which the assessee was to receive a fixed consideration. It is not a case where there was sale of individual goods to the RVUNL. Though the goods were specially designed to be used in the power project, the point of transfer of such goods is what is relevant for determining whether the title to the goods transferred to RVUNL during movement of goods from one state to another. The assessee contends that the title to the goods transferred to the assessee outside the State of Rajasthan, upon issuance of MDCC or other like documents - In the case in hand, the pre-dispatch inspection and issuance of MDCC, in view of terms of contract, did not serve the purpose of transfer of goods. This unequivocally establishes that there was no transfer of title of goods after their inspection and/or issuance of MDCC or any like document. The intent of the parties is quite clear. The clauses of ‘Final Handing Over’, ‘Project Schedule’, ‘Liquidated Damages’, ‘Warranty’, ‘Insurance’, ‘Completion of Contract’, the project import certificate letter dated 06.07.2009, etc. clearly reveal that under the present works contract, the complete unit/power project would be transferred by assessee to RVUNL. Further, as per SOG Act, the goods are said to be transferred only when they are put into deliverable state by the contractor as per the terms and conditions of contract. The transfer in the case was of entire thermal power project. The title to the goods involved in the execution of works contract also, accordingly, only transferred to RVUNL upon completion of contract and upon final handing over of the project as the goods had been subjected to some process to be accommodated in the power project - In the present case, the goods claimed to be sold by the assessee to be part of inter-state sales were not sold to the RVUNL as goods, but utilized in erection of the thermal power project. Since the erection of thermal power project in the state of Rajasthan can only be termed as an intra-state transaction, the property in goods used in such erection, whether as goods or as some other form, would constitute an intra-state sale and accordingly be subject to RVAT. The assessee has relied on several judgments, however none of those judgment deals with EPC works contract where there is a transfer of entire project. The judgment of COMMISSIONER, DELHI VALUE ADDED TAX VERSUS M/S. ABB LTD. [2016 (4) TMI 534 - SUPREME COURT], being on different facts, has rightly been distinguished by the RTB with sufficient reasons and it is not deemed necessary to reproduce those reasons here again. The questions of law framed are answered in favour of the Revenue and against the assessee.
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