2019 (1) TMI 1803 - HC - VAT and Sales Tax

Jurisdiction - validity of SCN - Works Contract or not - contract for designing, supplying and installing Modern Kitchens / Wardrobes - HELD THAT - The issue involved in the present writ petition is squarely covered by the decision of the Hon'ble Supreme Court in M/S. KONE ELEVATOR INDIA PVT. LTD. VERSUS STATE OF TAMIL NADU AND OTHERS 2014 (5) TMI 265 - SUPREME COURT , wherein the Hon'ble Supreme Court remitted the matter to the authorities with a direction to look into the contract entered into between the parties and thereafter decide the nature of the transactions. Hence the impugned assessment order is set aside and the matter is remitted to the respondent for passing fresh order, within a period of six weeks from the date of receipt of a copy of this order. Petition allowed by way of remand.

Summary

Issues involved: Determination of whether a transaction should be treated as a Works Contract or Direct Sale.

Analysis:
1. Nature of Transaction: The petitioner challenged an assessment order, arguing that it was issued without jurisdiction. The key issue was whether the transaction by the petitioner-Company should be classified as a Works Contract or a Direct Sale.

2. Legal Precedents: The petitioner's counsel referenced a judgment by the Hon'ble Supreme Court in a case involving Elevators to support their argument. They highlighted that in a subsequent case, the Supreme Court ruled that the supply and installation of Lifts/Elevators constituted a 'Sale' and not a 'Works Contract.' The petitioner's transaction involved designing, supplying, and installing Modern Kitchens/Wardrobes, which included various tasks such as measurement, design, alterations, manufacture, supply, and erection. The counsel argued that since both the present case and the Supreme Court judgment involved supply of materials and labor, the Supreme Court's decision should apply to the present case.

3. Court's Decision: The respondent's counsel agreed to the petitioner's request. The Court examined the Supreme Court judgments and concluded that the issue in the writ petition aligned with the Supreme Court's decision. Consequently, the assessment order was set aside, and the matter was remitted to the respondent for a fresh order based on the Supreme Court's judgment within six weeks. The writ petition was disposed of without costs, and the connected miscellaneous petition was closed.