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TMI Blog2021 (5) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to the Court the contract comprised mainly of hiring of services and a very small element of transfer of right to use goods was involved. It was held that the intention of the parties was to treat the contract as a contract for hiring of services and it was not permissible to divide the contract into two separate parts namely of engagement of services and transfer of right to use the goods. The State of Tripura had challenged this judgment before the Supreme Court and the SLP was dismissed by an order dated 01.02.2017. Thus, this judgment has achieved finality and the issues so far as this Court is concerned must rest here. It is declared that the respondents shall not be competent to levy Value Added Tax on the transactions bet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NGC for such purpose. The Tripura Value Added Tax department sought to levy VAT on the transaction in question on the premise that in the process of execution of the work in question, there was transfer of right to use the machinery and equipments. The Value Added Tax department issued instructions to ONGC to deduct tax at source on such transactions upon which the petitioner filed the present petition. 2. It is not necessary to take note of the relevant terms and conditions of the work order, i.e. the agreement under which the petitioner had carried out the work in question for ONGC since it is an undisputed position that identical situation had come up before this Court and by a judgment in case of Quippo Oil and Gas Infrastructure L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is virtually impossible to divide the contract. It is not possible to work out the value of the right to use goods transferred under the contract. In cases, where the contracts are easily divisible or where the parties have by agreement clearly indicated what is value of the service part and what is value of the transfer of right to use goods part, the contract may be divided. We are in agreement with the Delhi High Court that when the contract cannot be divided with exactitude then the Central Law must prevail. [35] Parties have also been paying service tax and if the State is allowed to tax any portion of the value of the contract then there has to be a proportionate refund of the service tax to that extent. This cannot be done w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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