TaxTMI 
TaxTMI 
TaxTMI 
2010 (3) TMI 1028
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....which is different from Ministry of Defence? (3) In the facts and circumstances of the case, whether the Tribunal is right in considering the works contract executed by the assesseecompany as inter-State works contract not eligible to levy of tax? (4) In the facts and circumstances of the case, whether the Tribunal is justified in holding that the sales effected by the assessee-company to the Indian Air Force cannot be construed as inter-State sales attracting the levy of tax under the CST Act? Facts leading to this case are as hereunder: The respondent-assessee is a public limited company incorporated under the provisions of the Indian Companies Act, 1956. The respondent is engaged in the business of manufacture and sale of aircrafts, helicopters, aero engines and fabricated parts and accessories of aircrafts and helicopters. It also undertakes repairing, overhauling, maintenance and service of aircrafts, helicopters, engines, instruments and their accessories. The respondent is a dealer registered under the provisions of the Karnataka Sales Tax Act, 1957. It has different divisions such as: (1) Air craft division (2) Helicopter division (3) Overhaul division ....
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....authority, second appeal was preferred before the Karnataka Appellate Tribunal, Bangalore which appeal came to the allowed on April 18, 2006 remanding the matter to the assessing officer. Being not satisfied with the order of remand, the respondent-assessee filed an application for rectification of the order dated April 18, 2006 which was allowed by the Tribunal on March 8, 2007 by granting full relief to the assessee by setting aside the order of remand. Being aggrieved by the same, present revision petitions are filed by the State. We have heard the learned Advocate-General for the revision petitioners and Mr. Narayan for the respondent-assessee. The learned Advocate-General contends that considering the nature of transaction and the manufacturing process of the respondent-assessee, contention of the assessee that the supply made by it to the Defence Department whether aircraft or helicopter or any other machinery cannot be considered as a sale or works contract has to be negatived. According to the State, considering the profit and loss account of the respondent-assessee, accounts maintained by the assessee depicts profit earned by it and provision made for payment of ....
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....p defence store within Hindustan Aeronautics Limited premises and all materials are supplied from the defence store and if any shortfall in the material to be supplied by the Defence Department, in such circumstances, respondent can purchase material from outside under the supervision and direct control of the Defence Department and he further submits that even the wages payable to the employees of HAL or any benefits to be given to its employees are under the complete control of the Defence Department, in the circumstances he contends that by lifting the corporate veil this court has to dismiss the revision petitions of the Revenue holding that the transaction of supply of machineries by the assessee to the Defence Department cannot be termed either as a sale or as a works contract, therefore he requests the court to dismiss these petitions. Having heard the counsel for the parties, what is observed by this court is that HAL is a corporate body incorporated under the provisions of the Indian Companies Act, 1956. By looking into the memorandum of association and the articles of association, it is treated as a separate legal entity. By looking into the various letters produced by ....
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....al Government only to manufacture and supply of aircrafts or helicopters or any other machineries manufactured by it to be supplied only to Defence Department and to hold that the assessee is a part and parcel of the Defence Department and cannot be taxed in respect of its transactions between the Defence Department and the assessee or not were not produced by the respondent. Similarly, first appellate authority had no occasion to consider these facts. But the Tribunal, without considering the facts involved in this case relying upon certain judgments has come to the conclusion that there is no sale or purchase between the assessee and the Indian Airforce. While considering the points which had arisen for its consideration, the Tribunal has not dealt in detail in regard to the sale of spare parts to the Navy or Airforce collecting Central sales tax on sale of goods by the assessee within the State to its different customers. Without considering these factual aspects the Tribunal has granted relief at the first instance remanding the matter to the assessing officer and later on order has been modified by setting aside the entire order of assessment on the ground that there is a mis....