Inter-State sale treatment for elevator supplies under a works contract excludes Delhi local sales tax

Supply of lifts/elevators against a works contract was treated as an inter-State sale because the order placed through the Delhi branch became a binding contract only on acceptance and further action by the supplier in Mumbai. The goods were appropriated to the contract outside Delhi, so the taxable incident arose at the place of appropriation and not under the Delhi local sales tax regime. On these facts, movement of goods from outside Delhi for execution of the works contract brought the transaction within inter-State sale, and the challenge failed because the Tribunal's finding was upheld.

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Issues: Whether the supply of lifts/elevators from Mumbai to Delhi for execution of a works contract constituted inter-State sales taxable under the local Delhi sales tax regime.

Analysis: The contract documents showed that the order placed through the Delhi branch was only an offer until acceptance and further action by the supplier, whereupon the contract crystallised in Mumbai. The goods were appropriated to the contract at Mumbai, and the incidence of Central Sales Tax or sale of goods arose at the place of appropriation. On the facts, the movement of goods from outside Delhi for execution of the works contract brought the transaction within inter-State sale.

Conclusion: The transaction was an inter-State sale and was not taxable under the Delhi sales tax on works contract regime.

Final Conclusion: The appellant's challenge failed because the Tribunal's finding that the supplies were inter-State sales was upheld, leaving no substantial question of law for consideration.

Ratio Decidendi: Where goods are appropriated to a contract outside the taxing State upon acceptance of the order, the resulting supply is an inter-State sale and cannot be taxed as a local works contract sale in that State.

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