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TMI Blog2014 (4) TMI 841X X X X Extracts X X X X X X X X Extracts X X X X ..... les Tax Act - Various terms of the agreement show that the assessee entered into an agreement with Japanese Corporation and signed a collaboration agreement with M/s.Hitachi Limited for importing components required for cranes and whereby, Hitachi had agreed to sell the drawings and other necessary documents to the assessee - and the second crane to be erected, commissioned and handed over - the nature of agreement and the taxable turnover has to be worked out only in accordance with the provisions under Section 3B – assessment set aside - Matter remitted back to the AO for re-working out the deduction – In absence of details available in the books of accounts as regards the turnover not involving transfer of property of goods, the agreemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein. On 23.09.1987, there was an inspection on the place of the business in Port Trust and found that the assessee had executed a contract and had also collected sales tax to an extent of Rs.9,08,683/-. Thus, on further investigation with the Port Trust, the Assessing Officer found that there were payments for the assessment years 1986-87 and 1987-88. The assessee submitted that as the works contract executed in the course of interstate trade, it was not liable to sales tax under the provisions of the Tamil Nadu General Sales Tax Act. 3. A reading of the order of assessment shows that in spite of an opportunity granted to the assessee to file its objections to the proposal to assess the transaction, the assessee did not produce the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f accounts for scrutiny. In these circumstances, the First Appellate Authority further pointed out that the assessee had collected taxes even without registration. The Port Trust authorities had also provided for sales tax at 5% on 70% of the contract value in the price structure. Therefore, the first Appellate Authority confirmed the order of the Assessing Authority. Aggrieved by the same, the assessee went on further appeal before the Tamil Nadu Sales Tax Appellate Tribunal. 6. Before the Sales Tax Appellate Tribunal, on the question as to whether the contract was one for sale of goods or for executing works, it pointed out that the contract was a composite contract for a sum of Rs.3,77,00,000/-for the design, manufacture, supply erecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1987-88. Aggrieved by such order, the present Tax Case (Revision) has been filed by the assessee. 8. Learned counsel appearing for the assessee submitted that considering the nature of transaction as evidenced by the agreement, the view of the Sales Tax Appellate Tribunal that the works executed by the assessee is liable to tax as sale under the Tamil Nadu General Sales Tax Act is not correct. Learned counsel further pointed out that when the goods moved from outside the State for the purpose of erection, the transaction could only be treated as works contract. Hence, the Sales Tax Appellate Tribunal had no material to hold that the work done by the assessee was not a works contract, but was only a sale. 9. A reading of the order the Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tween Hitachi, Japan having its principal office therein with the assessee, whereby, Hitachi had agreed to sell the drawings and other necessary documents to the assessee herein. The contract awarded to the assessee gives the scope of the work, as follows: "Scope of Work:- Design:- Manufacture, supply erection and commissioning of 2 Nos. of Tyre Mounted Transfer Cranes with Telescopic spreaders and supply of one number additional telescopic spreader. Price:- A lumpsum price of Rs.3,77,00,000/- for the design, manufacture, supply, erection, commissioning and handing over of 2 numbers tyre mounted transfer crane with 2 telescopic spreaders one for each cranes and for the supply of one number additional telescopic spreader at a cost of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of Section 3-B of the Tamil Nadu General Sales Tax Act and not a simple sale, as had been viewed by the Tamil Nadu Sales Tax Appellate Tribunal. The contract provides for assembling of design, manufacture assembling, supply erection, commissioning and handing over within a period of 13 months from the date of the order and the second crane to be erected, commissioned and handed over within three months thereafter. In the light of the nature of agreement thus entered into, the taxable turnover, hence, has to be worked out only in accordance with the provisions under Section 3B of the Tamil Nadu General Sales Tax Act. 13. Learned counsel appearing for the assessee pointed out that the Assessing Officer had not considered the deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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