TMI Blog2014 (7) TMI 660X X X X Extracts X X X X X X X X Extracts X X X X ..... customer is given an option either to wait for 60 days or to take another repaired compressor off the shelf of the Respondent. If the customer opts for the latter, then a delivery note cum debit advice as well as a repaired compressor is handed over to the customer. It is therefore evident that there is no sale of the repaired compressor. All that is done is that on payment of repair charges, the customer is given an option not to wait for 60 days and instead take another second hand repaired compressor immediately in lieu of the defective compressor. There was a transaction of cross transfer of property between the defective compressor and the repaired compressor and therefore, there was no consensual agreement of sale supported by price or other montetary consideration. We are in full agreement with the findings of the MSTT on this aspect. What is paid is only the repair charges and not the price for purchasing the repaired compressor. This is clear from the fact that even if the customer opted not to take a repaired compressor off the shelf of the Respondent, it would still have to pay the same repair charges for repairing its own compressor and wait for 60 days to receive th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the sales office of the company and not sale of goods under this Act as there is no consensual agreement of sale of the said compressor? (iv) Whether on the facts and in the circumstances of the case and on a true and correct interpretation of the impugned contract, Hon'ble Tribunal was correct in holding that the amount of ₹ 2,02, 55,207/-, received by the respnodent from its customers against the impugned transfer of property in compressor is a price of labour charges or repair charges? 2. The brief facts are as follows :- 3. The Applicant is the Additional Commissioner of Sales Tax, VAT-III, Mumbai. The Respondent is engaged in the business of manufacturing and selling compressors of various models and capacities used in air-conditioners. It is also engaged in accepting defective compressors outside the warranty period with certain fixed repair charges and replacing them at the option of the customer with any other repaired compressor, off the shelf. 4. When a customer of the Respondent has a defective compressor outside the warranty period, he approaches the Respondent with the same for repairs. At such time, the customer is informed about the repairing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BST Act before the Joint Commissioner of Sales Tax (Appeals), Pune Division, Pune who vide his order dated 17th June 2009 dismissed the appeal of the Respondent. 6. Being aggrieved by the order passed in the First appeal, the Respondent approached the MSTT in Second Appeal. In Second Appeal, the MSTT, after considering the submissions of the parties, the evidence produced, and the law as laid down by the Supreme Court as well as various High Courts on the subject, allowed the Appeal of the Respondent inter alia holding that a transaction of cross transfer of property between a defective compressor and repaired compressor off the shelf of the Respondent, did not amount to a sale of the repaired compressor by the Respondent to its customer as there was no consensual agreement of sale supported by price or money consideration. This being the case, the MSTT held that there was no taxable event for levy of sales tax on ₹ 2,02,55,207/- which was in the nature of labour charges or repair charges. 7. Being aggrieved by the said order of the MSTT passed in Second Appeal, the Applicant preferred a reference application under section 61 of the BST Act for drawing up a statement o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the State for cash or deferred payment or other valuable consideration. Therefore, in order to constitute a sale, it is necessary that there should be an agreement between the parties for the purpose of transferring title to the goods which pre-supposes the capacity to contract; supported by monetary consideration; and the title in the property actually passes in the goods. Unless all these elements are present, there can be no sale. This in fact has been held by the Supreme Court in the case of State of Madras v/s Gannon, Dunkerley and Co. (Madras) Ltd., reported in (1958) 9 STC 353 (SC). Referring to the Benjamin on Sale, 1950 Edition, the Supreme Court quoted with approval the following :- Sale is the transfer of the ownership of a thing from one person to another for a money price. Where the consideration for the transfer consists of other goods, or some other valuable consideration, not being money, the transaction is called exchange or barter; but in certain circumstances it may be treated as one of sale. 10. The expression valuable consideration came up for consideration before the Supreme Court in the case of Devi Dass Gopal Krishnan and others v/s State of Pun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n an option not to wait for 60 days and instead take another second hand repaired compressor immediately in lieu of the defective compressor. 12. The MSTT, after considering all the evidence in this regard, came to the conclusion that in the present case, there was a transaction of cross transfer of property between the defective compressor and the repaired compressor and therefore, there was no consensual agreement of sale supported by price or other montetary consideration. We are in full agreement with the findings of the MSTT on this aspect. What is paid is only the repair charges and not the price for purchasing the repaired compressor. This is clear from the fact that even if the customer opted not to take a repaired compressor off the shelf of the Respondent, it would still have to pay the same repair charges for repairing its own compressor and wait for 60 days to receive the same from the Respondent, after repairs. This puts it beyond the realm of doubt that what is charged to the customer by the Respondent is only repair charges and not a price for the sale of the repaired compressor. 13. Ms Helekar, learned counsel appearing on behalf of the applicant submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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