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of <h1>Court quashes detention order, directs release of goods in inter-State sale dispute.</h1> The court allowed the petition, quashing the detention order dated 7.11.2007 and subsequent proceedings. The court directed the respondents to release the ... Detention order seeked to be quashed - prayer for direction be issued to respondent Nos. 2 and 3 to release the goods and vehicle with documents without any further delay - Held that:- The argument of the learned State Counsel that the petitioner is executing a 'works contract', which would include installation of any goods brought in the State of Punjab, has not impressed us merely because the expression 'installation' has been used in the term 'works contract' as defined in Section 2(zu) of the Act because that will not change the character of the 'contract for sale' to that of a 'works contract'. The argument is wholly misconceived and is, thus, liable to be rejected. For the reasons mentioned above, this petition succeeds and the same is accordingly allowed. Consequently, the detention order dated 7.11.2007 (P-3) and all subsequent proceedings in pursuance thereto, are hereby quashed. The respondents are directed to release the goods of the petitioner forthwith. Issues Involved:1. Quashing of the detention order dated 7.11.2007.2. Release of goods and vehicle with documents without delay.3. Determination of whether the transaction was an inter-State sale or intra-State sale.4. Classification of the contract as a 'contract for sale' or 'works contract'.Issue-wise Detailed Analysis:1. Quashing of the Detention Order:The petitioner challenged the detention order dated 7.11.2007 and subsequent proceedings, arguing that the VAT number was not required as the goods were for self-use and not for sale in Punjab. The court found that the detention order was based on the non-mentioning of the TIN number, which was not a valid reason for detention. The court referenced a previous incident where the petitioner faced similar detention, and the goods were released after verification. The court concluded that the respondents' deviation from the earlier course was not permissible in law.2. Release of Goods and Vehicle with Documents:The petitioner sought the release of detained goods and vehicle, arguing that the goods were meant for self-use and not for sale, thus not requiring a VAT number. The court directed the respondents to release the goods forthwith, emphasizing that the detention was not justified as the petitioner had complied with the necessary documentation and had paid Central Sales Tax, indicating an inter-State sale.3. Determination of Inter-State Sale or Intra-State Sale:The primary question was whether the transaction was an inter-State sale or intra-State sale attracting VAT under the Punjab Value Added Tax Act, 2005. The court applied the test laid down by the Supreme Court in the case of State of A.P. v. National Thermal Power Corporation Ltd., which includes three essential ingredients: a contract of sale incorporating inter-State movement of goods, actual movement of goods from one State to another, and the conclusion of sale in another State. The court found that all three conditions were satisfied, thus classifying the transaction as an inter-State sale.4. Classification of Contract as 'Contract for Sale' or 'Works Contract':The respondents argued that the transaction was a 'works contract' and not a 'contract for sale,' requiring VAT registration in Punjab. The petitioner contended that the installation of lifts was incidental to the supply of goods, making it a 'contract for sale.' The court referenced the Supreme Court's judgment in Kone Elevators (India) Ltd., which distinguishes between 'contract for sale' and 'works contract' based on the intention of the parties and the nature of the contract. The court concluded that the main object was the supply of lifts, with installation being incidental, thus classifying it as a 'contract for sale.'Conclusion:The court allowed the petition, quashing the detention order dated 7.11.2007 and subsequent proceedings. The court directed the respondents to release the goods of the petitioner forthwith, emphasizing that the transaction was an inter-State sale and not a 'works contract.' The court rejected the respondents' argument that the petitioner was executing a 'works contract,' stating that the installation was incidental to the supply of goods.
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