TMI Blog2015 (4) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... e customer involving transfer of goods and labour. Apex Court while considering an identical provision in the case of Builders Association of India (1996 (11) TMI 355 - SUPREME COURT OF INDIA) under the provisions of Kerala General Sales Tax Act has categorically held that the alternate method of composition provided under composition tax is optional, there is no compulsion upon any contractor to opt for the alternate method of taxation and by opting to this alternate method, the contractor saves himself the botheration of book keeping, assessment, appeals and all that it means. The assessee having opted for the composition benefit voluntarily and with the full knowledge of the features of the alternate method of taxation, is liable to make the payment of tax on the total consideration of the works contract involving both labour and transfer of goods. Segregation of composite contract is not permissible under Section 15(1)(b) of the Act. Even if any segregation is made for the purpose of billing and separate invoices are raised towards each portion, it does not alter the nature of composite contract. - Tribunal on proper appreciation of the terms of the contract recorded a plaus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee confirming the orders passed by the authorities. 4. Being aggrieved by the common judgment passed by the Tribunal, these appeals are filed by the assessee. 5. Heard the learned counsel appearing for the parties and perused the material on record. 6. Learned counsel appearing for the petitioner Sri M N Shankare Gowda vehemently argued that the assessee has entered into four different contracts viz., (a) laying down of civil foundation (b) supply and installation of electrical line (c) Supply of electrical items (d) erection and commissioning of WTGs supplied by customer and has paid the tax as per Section 15(1)(b) relating to the contracts (a) to (c) referred to above and only as regards contract relating to erection and commissioning of WTG supplied by the customer, which is purely labour contract, the assessee having discharged the service tax liability is not liable to pay the composition tax under Section 15(1)(b) of the Act. The learned counsel placed reliance on the Judgment of this Court reported in H S Chandrashekar Hande vs State of Karnataka (2012(72) KLJ 116) 7. Per contra, the learned counsel Sri K M Shivayogiswamy appearing for the revenue s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... WTGs are commissioned. The Fire Allied Perils, Earthquake Third party risk policy will be taken by you as soon as the WTG is commissioned at your project site. Scope of Work @ Annexure III reads as under: We will do the complete installation, erection and commissioning of the WTG and all electrical installation for WTG using material and also undertake to do the civil work with material as per your requirement and shall supply to do the civil work with material as per your requirement and shall supply electrical terms required for D.P. Structure and 33 KV internal external line . This offer letter demonstrates that the offer was for the services required for the erection and installation of WTG, which is a single integrated contract. For the sake of convenience, if the work orders, pursuant to the offer letter, is segregated to execute the unique wind farm project at specific location at site addresses given by the customer, it does not lose its composite, single, integrated nature 10. A contract has to be read as a whole and the purpose for which the contract was entered into by the parties has to be ascertained from the terms of the contract. The intention of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olved both in works contract as well as in labour contract. In other words, a works contract is a composite contract which includes payment of labour contract plus payment of material. In respect of that labour charges under section 17(6), tax is payable on the total consideration in the works contract. If the labour contract is an individual contract where the component is only labour, no tax is payable . 14. Thus it is clear that in a works contract involving transfer of goods and labour, tax is payable under Section 15(1)(b) on the total consideration of the works contract. If the labour contract is an individual contract involving only labour, no tax is payable. In the case on hand, the assessee has segregated the activities as per the work orders executed against the offer for erection and installation of WTGs. It is not the case of receiving labour related charges for executing pure labour work without transferring any property in goods. The entire contract, if perused as a whole, is in the nature of composite single integrated contract, though designed as it is four separate work orders. All the segregated activities are related to the very same project with the very same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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