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2016 (4) TMI 483 - SUPREME COURT

2016 (4) TMI 483 - SUPREME COURT - TMI - Levy of Sale tax - Contract entered for installation, erection and commissioning of “Wind Energy Converter” - Held that:- a fundamental mistake which is committed by the authorities below is that foundation work or installation work, which is even considered as part of works contract by the Assessing Officer himself, cannot be treated as “goods”. Even if we proceed on the basis that such work does not fall within the expression “Wind Mill”, still it could .....

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ing etc. was “series of activities and further that it was indivisible”. On this finding as well, no further action to levy sales tax was required. - Apex Court decided the case in favour of appellant with consequential relief - CIVIL APPEAL NO(S).1954/2006 - Dated:- 8-3-2016 - A.K. SIKRI AND ROHINTON FALI NARIMAN For The Appellant : Mr. Dushyant Dave, Sr. Adv., Mr. Subramoniam Prasad, Sr. Adv., Mr. Abhay Kumar, Adv., Mr. Tenzing Tsering, Adv., Mr. Utkarsh Srivastava, Adv., Mr. Ashmeet Singh, Ad .....

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which need to be noted for the disposal of the instant appeal, are that the appellant is engaged, inter alia, in the manufacture, sale, installing a0nd commissioning of Wind Mill (Wind Energy Converter). It is a registered dealer under the Karnataka Sales Tax Act (hereinafter referred to as the Act ). The appellant had entered into the contracts dated 12th June, 1997 and 11th July, 1997 with M/s. Jindal Aluminium Ltd., Bangalore. These contracts were for installation, erection and commissioning .....

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mption is contained in Section 8 of the Act which reads as under: Section 8. Exemption of tax:- (1) No tax shall be payable under this Act on the sale of goods specified in the Fifth Schedule subject to the condition and exceptions, if any, set out therein. Fifth Schedule to the Act gives list of various kinds of goods which are entitled to exemption. As mentioned above, insofar as Wind Mills are concerned, relevant Entry is at Serial No. 57 which is as follows: 57. Wind Mills and any specially .....

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can be seen from the assessment order passed by the Assessing Officer. The relevant portion whereof giving such details, is as follows: In view of the above it is proposed to assess your case as follows: In view of the above it is proposed to assess your case as follows: Total turnover Less: Rs.19,67,50,000.00 1. Wind Mills (Blades & Generators) Rs.12,60,00,000.00 2. Wind Mills (Parts i.e., Baskets & Studs & Nuts & other Accessories ₹ 3,49,60,805.00 Add:G.P.@8% ₹ 27, .....

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ion of works contract u/s 43 of the Fifth Schedule to the Act ₹ 2,59,24,173.50 at 10% Rs.25,92,417.00 2) TOT on ₹ 2,59,24,173.50 @ 3% ₹ 7,77,725.00 Total tax proposed Rs.33,70,142.55 It is manifest from the above that insofar as the manufacturing of various parts of Wind Mills are concerned, they were given exemption by applying the provisions of Section 8 read with Entry 57 of Fifth Schedule to the Act. The figure to this effect was arrived at ₹ 17,08,25,826/-. However, .....

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he Appellate Authority remanded the case back to the Assessing Authority to redo the assessment while doing so he also observed that there was no immediate transfer of moveable property in goods through various series of activities like foundation work, electrical work, commissioning etc. and hence, it was indivisible and comprehensive contract of supply, erection/installation and commissioning of wind mills as described under Section 2(1)(v-i) of the Act. This order of remand was challenged by .....

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signed to the same. It has further observed that since Section 8 of the Act exempts certain categories of goods which are specified in the Fifth Schedule of the Act, it is only those items which qualify as goods are to be exempted. Thereafter, an endeavour is made to point out what would be the goods falling within the expression Wind Mill . It has held that the expression Wind Mill would include rotor consisting of blades, the hub assembly; nacelle; yaw system, tower and grid synchronization as .....

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