2002 (9) TMI 806 - HC - VAT and Sales Tax

Summary

Issues Involved:
The judgment involves the disallowance of exemption claims under section 6(2) of the Central Sales Tax Act, 1956 for various assessment years, based on the nature of the transactions as either inter-State sales or deemed sales taxable under the Kerala General Sales Tax Act, 1963.

Details of the Judgment:

1. The assessee, M/s. Siemens Limited, received work orders split into "supply order" and "service order" from Cominco Binani Zinc Limited (CBZL) for the supply and erection of electrical equipment. The supply order involved manufacturing goods outside Kerala as per purchaser's design and specification, with final inspection by the purchaser before dispatch. The assessee claimed exemption under section 6(2) of the CST Act for sales during inter-State movement.

2. The assessing authority disallowed the exemption claims, treating the transactions as deemed sales under the KGST Act. The authority considered the contracts as indivisible, leading to disallowance of exemption and imposition of tax under the KGST Act. Appeals by the assessee were dismissed, leading to the present case before the High Court.

3. The main contention was whether the supply order constituted an inter-State sale or a sale within the State. The assessee argued that the supply order involved goods manufactured outside Kerala, with title transfer during inter-State movement, qualifying for exemption under the CST Act.

4. The Court referred to previous decisions and held that the supply order should be considered as an inter-State sale, not an indivisible contract. The Court directed the assessing authority to reconsider the matter, emphasizing the separate nature of the supply and service orders, along with the transfer of title during inter-State movement.

5. Considering the facts presented and the legal principles involved, the Court concluded that the assessing authority should reevaluate the transactions after hearing both parties, highlighting the distinct nature of the supply order and the applicability of inter-State sale provisions under the CST Act.

6. The Tax Revision Cases (T.R.Cs) were disposed of accordingly, with related orders on certain miscellaneous petitions also dismissed. The Court's decision emphasized the need for a thorough reconsideration by the assessing authority based on the specific details and legal interpretations presented during the proceedings.