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TMI Blog2009 (1) TMI 814X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the parties though it is admitted by the petitioner that Otis, Mumbai despatched 94 per cent of the materials to Otis, Kolkata and Otis, Kolkata procured balance six per cent of the materials. Appeal allowed. - - - - - Dated:- 16-1-2009 - DATTA CHAUDHURI R.K. AND DEB KUMAR CHAKRABORTI, JJ. DEB KUMAR CHAKRABORTI (Technical Member). By this application filed under section 8 of the West Bengal Taxation Tribunal Act, 1987, the petitioner has assailed the order dated May 28, 2007 passed by the Assistant Commissioner, Sales Tax, Corporate Division. Factual background in a nutshell is as follows: The petitioner, M/s. Otis Elevator Company (India) Limited, is a company within the meaning of the Companies Act, 1956 having its office at Jeevan Deep (6th Floor), 1, Middleton Street, Kolkata 700 071. The registered office of the petitioner-company is situated at 9th floor, Magnus Tower., Mindspace, Link Road, Malad (West), Mumbai 400 064. The petitioner is a registered dealer under the West Bengal Value Added Tax Act, 2003 and also under the Central Sales Tax Act, 1956. The petitioner is engaged in the manufacture of parts and components of lifts/elevator, and the ere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... engal VAT Rules, 2005 as ultra vires of the Constitution of India being violative of articles 14, 19 and 301. The learned senior advocate has referred to a sample of proposal by the petitioner's Kolkata branch dated March, 08, 2006 to M/s. Finex Merchants (Pvt.) Ltd., 1A, Bindubashini Street, Kolkata 700 027 for installation of one passenger elevator at 199, J Block, New Alipur, Kolkata 700 053 (vide annexure, page 33), confirmation of the proposal dated March 30, 2006 (vide page 32), the details of the works (vide page 34), maintenance (vide page 35), price variation clause (vide page 26), conditions of contract (clauses 5,9 and 14) (vide pages 38 to 41) and the amount of total price (vide page 42). It has been submitted by the learned senior advocate that there is one contract for the entire works. It is alleged that contrary to the contractual understanding between the petitioner and its customer, respondent No. 3 proceeded on the erroneous assumption as if the petitioner's customer had purchased from the petitioner's Mumbai office the parts and components of the lift/elevator as such in an inter-State transaction and thereafter brought such goods himself for getting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is on the petitioner's account that such goods are imported into the State of West Bengal. It is the petitioner who is registered dealer in terms of the provisions of the West Bengal VAT Act, 2003 and the West Bengal VAT Rules, 2005 and is responsible for bringing the goods into the State. The learned senior advocate has prayed that the impugned order has been passed without considering the true factual position and as such, the order dated May 28, 2007 deserves to be set aside on this ground alone. Mr. T.N. Banerjee, learned State Representative has relied on the order dated May 28, 2007 and also the affidavit-in-opposition. At the outset Mr. Banerjee pointed out that the petitioner's application for way-bill was not rejected but in the said order it was pointed out that the petitioner's entitlement for obtaining way-bill was restricted to goods brought by the petitioner on their own account either by way of purchase or by way of stock transfer from other branch office or head office. It is argued by the learned State Representative that the transfer of property in goods used in the execution of works contract is also a deemed sale and it was also claimed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . . (b) the installation or the repair of any machinery affixed to a building or other immovable property, (c) and (d) . . . The petitioner-company is engaged in the manufacture of parts and components of lifts/elevators and the erection, installation and commissioning thereof. When the petitioner-company receives an order for supply and installation of a lift/elevator in a building, it is a works contract. The only dispute in this case is if the materials of a lift/elevator come from outside West Bengal whether the contractee, that is, the consumer in this case, or the contractor, that is, the petitioner-company is liable to obtain and issue way bill against the importation/bringing those goods from outside West Bengal. Mr. Bajoria, learned senior advocate, has cited the decision of this Tribunal (Three Member Bench) in the case of Gontermann Pipers (India) Pvt. Ltd. (RN-295 of 2005) and the decision of the honourable Supreme Court of India in the case of National Thermal Power Corporation Ltd. [2002] 127 STC 280. The main thrust of citation of those cases is to state that the situs of sale or purchase is immaterial in the case of inter-State sale or purchase. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Bombay buyer at Bombay. The appellant-company claimed that sale was completed at Bombay and it could not be an inter-State sale. The Madras High Court held that the sale was an inter-State sale within the meaning of section 3(a) of the CST Act. English Electric Company appealed to the Supreme Court. In the context of the aforesaid facts the Supreme Court ruled that Bombay branch of the appellant-company was acting as the agent of the company and rejected the contention that the Madras branch sent the goods to the Bombay branch, which in its turn sold the goods to the Bombay buyer. This Tribunal also observed that the honourable Supreme Court held therein (at page 429 of 38 STC): The appellant in the present case sent the goods direct from the Madras branch factory to the Bombay buyer at Bhandup, Bombay. The railway receipt was in the name of the Bombay branch to secure payment against delivery. There was no question of diverting the goods which were sent to the Bombay buyer. When the movement of goods from one State to another is an incident of the contract it is a sale in the course of inter-State sale. It does not matter in which State the property in the goods p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale, then the sale is an inter-State sale. In National Thermal Power Corporation Ltd. [2002] 127 STC 280, the honourable apex court held that (at page 282 of STC): Electricity as goods comes into existence and is consumed simultaneously: the event of sale, in the sense of transferring property in the goods, merely intervenes as a step between generation and consumption. In such a case when the generation of electricity takes place in one State wherefrom it is supplied and it is received in another State where it is consumed, the entire transaction is one and can be nothing else excepting an inter-State sale on account of instantaneous movement of goods from one State to another occasioned by the sale or purchase of goods, and is squarely covered by section 3 of the Central Sales Tax Act, 1956. The Legislature of neither State can artificially appoint a situs of sale so as to create a territorial nexus attracting applicability of legislation enacted by it. The honourable apex court also opined that the situs of the sale or purchase is wholly immaterial as regards inter-State trade or commerce. In view of section 3 of the Central Sales Tax Act, 1956, all that has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner's place of business at Kolkata for repairing purposes and thereafter sent back to its original place for being affixed to the machinery and/or land outside West Bengal. Admittedly, the petitioner was the consignee of such goods received for repairing purposes. This Tribunal while interpreting rule 103 of the West Bengal VAT Rules, 2005 observed that: Here in this rule two distinct words are used. These are: 'imported' and 'brought'. The word 'imported' means the import of goods by purchase for sale while the word 'brought' means import of goods other than purchase for any purpose which includes repairing purposes, stock transfer, etc. This Tribunal also observed that: Admittedly, the petitioner-company is a registered dealer. Hence, rule 110 of the West Bengal VAT Rules is applicable to the dealer. In rule 103 as well as in rule 110 and rule 111 of the VAT Rules, 2005, the words 'on his own account' are used. According to respondent No. 1 those words inserted in rules 103, 110 and 111 of the VAT Rules means ownership over the goods. But these words are used in a wider sense. A registered reseller or manufacturer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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