2021-VIL-677-TRI

VAT High Court Cases

Demand of VAT on sale and supply of the elevators - petitioner had undertaken a contract for installation and commissioning of elevators - In the course of execution of this work, the elevators would be procured from the petitioner’s branch offices outside the State and sold to the contractees on discharge of applicable CST - the Assessing Officer was of opinion that VAT is liable on the cost of elevators – appeal before revisional authority was dismissed on the ground that there is no double taxation – HELD - the Assessing Officer and the revisional authority have made a serious error in demanding VAT from the petitioner on sale and supply of the elevators to its contractees – the machinery was supplied separately by way of a sale which was in the nature of an inter-state sale and on which applicable Central Sales Tax was paid - in the work of installation of such machinery and commissioning of the project, the petitioner could be charged only on the incremental value where the local sale took place - The sale of elevators cannot be by any standard treated as a local sale - The Assessing Officer devised an artificial means to tax the same under local VAT by suggesting that the petitioner had a local registration and in the course of execution of the work of installation and commissioning of elevators, the petitioner could have brought the machinery from outside and implemented the contract - Being a clear case of inter-state sale, the CST was applicable - Ignoring the facts, the Assessing Officer by way of artificial means tried to tax the same transaction again as a local sale demanding VAT which was wholly impermissible – the impugned order of assessment is set aside and revision petition is allowed

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