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TMI Blog2009 (1) TMI 814X X X X Extracts X X X X X X X X Extracts X X X X ..... or, and the erection, installation and commissioning thereof. The petitionercompany manufactures the parts and components at its factory located at Bangalore in Karnataka and procures various other parts and components which are received at its consolidated centre located at Vasa in Maharashtra. The petitioner-company undertakes an indivisible lump sum works contract for erection and installation of lifts and elevators. According to requirement at each site, the petitioner manufactures and/or purchases various parts and components of lifts and elevators and sends these parts from Karnataka and Maharashtra to the site where lift and elevator is to be erected. Such supply constitutes generally 94 per cent of the materials required for installation of lifts/elevators, balance six per cent is purchased by the Kolkata office. In the delivery challan and consignment note, the petitioner's head office is the consignor and Kolkata office is the consignee. The petitioner's head office takes out insurance to cover the risk of loss/ damage to the goods while in transit to and at site. The consolidated billing for the entire job is done from the head office of the petitioner-company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r getting the lift installed on his own account. To rebut the findings of respondent No. 3, learned senior advocate has submitted that: (a) the petitioner consigns the goods directly in its own name to sites of job in course of the execution of the works contract and the consignee, as per sales tax value-cum-delivery challan as well as consignment note, is the petitioner himself; (b) as per the contract executed between the petitioner and its customers, the petitioner is solely responsible for transporting the goods into the State of West Bengal and thereafter installing the same. The goods are transported into the State of West Bengal at the petitioner's risk; (c) the expenses incurred on insurance to cover the risk of loss/damage to materials while in transit to and at site are borne by the petitioner; (d) it is the complete, fabricated and fully functional lift/elevator which is handed over by the petitioner to its customer, and (e) the property in the goods is transferred to the customer after the commissioning of the lift/elevator on full payment of the price. Mr. Bajoria has further submitted that the sale involved in this case in the works contract between the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that the transaction is an inter-State sale by Otis, Mumbai to the customer in West Bengal, albeit in a works contract. The learned State Representative has submitted that in that case the transaction also means that it is an inter-State purchase by the customer in West Bengal. In other words, it has been argued that if Otis Maharashtra or Otis Karnataka makes inter-State sale then it cannot be denied that the customer in West Bengal makes an inter-State purchase which means that the goods are transported into the State of West Bengal on account of the customer either by himself or through his agent for installation which is incidental to the sale. The learned State Representative has pointed out that the sales tax value-cum-delivery challan bearing No. 00701/7000590/21 dated January 28, 2007 annexed at page 44 of the main petition bears the remarks: "Not for sale: Execution of works contract". The learned State Representative has referred to section 73 of the West Bengal VAT Act, 2003, rule 110 and rule 111 of the West Bengal VAT Rules, 2005 and has emphasized on the words "on his own account". In the opinion of the learned State Representative since the goods are transported on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pipers (India) Pvt. Ltd. (RN-295 of 2005) this Tribunal did not decide whether "leases of steel-rolls during the relevant period were deemed sales in course of inter-State trade or commerce within the meaning of section 3(a) of the Central Sales Tax Act, 1956 or exigible to tax under the State Sales Tax Act," and set aside the assessment order, appellate order and the revisional order with a direction to the assessing officer to reconsider the petitioner's claim that the leaserental received by the company for transfer of right to use the disputed equipment is in course of inter-State trade or commerce in the facts and circumstances of the case. However, in course of delivery of the judgment a large number of decisions of several High Courts and apex court were taken into consideration. In the Gontermann Pipers (India) Pvt. Ltd. (RN-295 of 2005), the petitioner-company entered into agreements with different manufacturers having their registered office in West Bengal to lease out steel rolls upon consideration and on the basis of such agreement those steel rolls were delivered at different places all outside West Bengal. The petitioner claimed that the transactions in question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale is one which occasions the movement of goods from one State to another. The inter-State movement must be the result of a covenant, express or implied, in the contract of sale or an incident of the contract. It is not necessary that the sale must precede the inter-State movement in order that the sale may be deemed to have occasioned such movement. It is also not necessary for a sale to be deemed to have taken place in the course of inter-State trade or commerce, that the covenant regarding inter-State movement must be specified in the contract itself. It will be enough if the movement is in pursuance of and incidental to the contract of sale." The learned senior advocate has claimed that the nature of transaction in the instant case is similar to this case. The movement of goods from Mumbai to Kolkata is the deemed inter-State sale, but the property in the goods passed to the customer after installation, erection and commissioning of the lift/elevator in West Bengal. The situs of sale is immaterial with respect to the fact where the property passes to the buyer. As such, it is argued that before transfer of the property in the goods, it is the responsibility of the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asions the movement of goods from one State to another; (b) is effected by a transfer of documents of title to the goods during their movement from one State to another. If the sale or purchase satisfies any one of the two requirements it is deemed to be a sale or purchase of goods in the course of inter-State trade or commerce and, by virtue of articles 269 and 286, the sale or purchase would be beyond the competence of a State Legislature to tax without regard to the fact whether such a prohibition is spelled out by the description of a legislative entry in Seventh Schedule or not. On perusal of the sample proposal made to M/s. Finex Merchants (Pvt.) Ltd., for installation of one passenger elevator, the details of the contract, maintenance, condition of contract, etc., we accept the contention of the senior learned advocate that the nature of the contract is a works contract. The property in the goods transferred to the customer after completion of erection, installation and commissioning of the entire works. In this connection we would like to quote para 14 of the conditions of contract which read as follows: "This contract being an indivisible works contract, any packing cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osal of the goods so imported against way bill. A person can import Jaypur Marbles from Rajasthan for using those marbles in his buildings, but he is liable to account for those goods before the appropriate sales tax authority after importing those goods against way bill. A registered dealer like the applicant is liable to account for the goods so brought for repairing purposes. Under the normal circumstances such type of dealer shall maintain a stock book of goods so brought for repairing purposes. He shall also keep such documents to show that the goods after repairing has returned to the customer outside West Bengal. If such stock book or document of exit of the goods are not maintained, the authority concerned may proceed on the basis that the goods have been sold in West Bengal and take legal action against the dealer. When a goods sent for repairing purposes is received by the petitioner as consignee, the goods are brought on account of the repairer and he remains accountable for the goods. Respondent No. 1 has failed to appreciate the meaning of the word 'on his own account' in the context of the purpose for which way bill is required. In the above circumstances we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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