TMI Blog2018 (8) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... n incorporation in the works. If the transfer of goods, which are incorporated in the works, are those brought from the other State, it has all the characteristics of an inter-state sale - decided in favor of in favor of the out-of- state contractor. Whether the outside contractor who had carried out the inter-state works contract, in his status as an importer has obtained registration or not? - Held that:- The necessity to get a registration cannot be disputed. In such circumstances, there is a reason for penalty but however, there being no tax evasion, the consequence would be the imposability to compute the tax evaded, and in that context the maximum penalty of ₹ 10,000/- would be imposed on the dealer, in all the three years - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erala? 2. The admitted facts are that the dealer is engaged in installation and commissioning of water and sewage treatment plant. The dealer enters into contract with various clients, interalia within the State of Kerala and the work order indicates the scope of the work; which consists of design, civil, electrical and mechanical works, erection, testing and commissioning of the Effluent treatment plant and handing over the plant on a turn key basis as per the equipment/materials and technical specification. The contracts are entered into by various clients and in pursuance to the same, the dealer who has its office in Chennai, transports the materials from Chennai to the work site of the client and installs such treatment plants as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has dispatched the materials from outside the State, which was received by their client within the State of Kerala. In fact the dealer has transported the goods inter-state and incorporated the same in the works and the transfer of goods is only by way of accretion into the works. The Tribunal in the revision filed by the State, has found that the appellant entered into agreements with the customers, within the State of Kerala, for execution of works contract and the agreed work included erection, trial run, testing and commissioning of effluent treatment plant. The agreement also indicates that the plant installed would be handed over on turn key basis. On such terms of the agreement, the Tribunal entered into a finding that on the basis o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said case. Here the goods were brought into the State in pursuance to the contract and directly incorporated in the works. 7. Yet again, we notice that the order of the Tribunal challenged by the State has dealt with the issue elaborately looking at the decisions of the Hon'ble Supreme Court with reference to Article 366(29) A as also the specific question of transfer of goods inter-State for the purpose of incorporation in a works contract. Suffice it to notice Builders Association of India v. Union of India [(1989) 73 STC 370] wherein it was stated the 46th amendment does no more than making it possible for the State to levy sales tax on the price of goods and materials used in works contract as if there was a sale of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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