TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether the transaction between the assessee and the Railways was an inter-State sale or an intra-State transaction; (ii) Whether the turnover arising from the works contract was taxable under the Tamil Nadu General Sales Tax Act, 1959.
Issue (i): Whether the transaction between the assessee and the Railways was an inter-State sale or an intra-State transaction.
Analysis: The contract records showed that the assessee fabricated the sleepers at Raipur and the goods were then moved to Tamil Nadu for installation. The local activity was limited to fitment using the fabricated materials already supplied. The statutory scheme under Section 7(F) had to operate with the charging provision in Section 3, and Explanation 3 to Section 2(n) did not apply where the goods were fabricated outside the State and brought into Tamil Nadu for execution of the contract. The movement of goods from Raipur to Tamil Nadu therefore supplied the necessary inter-State character.
Conclusion: The transaction was held to be an inter-State sale and not an intra-State transaction, in favour of the assessee.
Issue (ii): Whether the turnover arising from the works contract was taxable under the Tamil Nadu General Sales Tax Act, 1959.
Analysis: Since the transaction was found to be an inter-State sale, it fell outside the ambit of domestic sales under the Tamil Nadu General Sales Tax Act, 1959. The record also showed that the same transactions had been assessed under the Central Sales Tax Act, 1956, reinforcing that the State levy could not be sustained on the disputed turnover.
Conclusion: The disputed turnover was not liable to tax under the Tamil Nadu General Sales Tax Act, 1959, in favour of the assessee.
Final Conclusion: The revisions succeeded, the impugned orders were set aside, and the State levy on the disputed turnover was displaced by the inter-State character of the transactions.
Ratio Decidendi: Where goods are fabricated in one State and moved to another State for execution or fitment under the contract, and the local activity is only incidental to installation, the transaction is an inter-State sale and cannot be brought to tax as an intra-State sale under the State sales tax law.
TaxTMI 
