2019 (2) TMI 429

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....ant is as to whether the Build Operate Maintain and Transfer (BOMT) contract entered into by the appellant with the Motor Vehicles Department of the State of Kerala was a works contract or a right to use the goods. The clarificatory authority found that it is a works contract, against which the appeal is filed. 2. The learned Counsel for the assessee would contend that the contract was entered into in pursuance of the decision of the Government of Kerala to fully computerise the Motor Vehicles Department (MVD) under the Fully Automated Services of Transport (FAST project). The appellant herein was the Service Provider for the MVD. As per the contract, the appellant has to build up infrastructure, including site preparation, air conditionin....

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....reference is made to clause (9) of the agreement produced as Annexure B to advance their contention. 4. The learned Senior Government Pleader, however, points out that at no point during the three year period, when the appellant is operating and maintaining the system, could there be replacement of the goods already installed unless there is a defect, which would require such replacement; which as per the contract is the responsibility of the appellant. It is specifically argued that the transfer of goods occurs on the system going-live. The further obligation of the appellant is only to maintain and operate the system and it can exercise no right to property in the goods. The entire exercise is also covered by the decision of the Hon'....

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....hes that may arise in its operation. The obligation to operate and maintain the goods does not confer any title of the goods on the appellant, who has already executed the works contract with transfer of the goods occassioned on its accretion to the works. 7. The learned Counsel for the assessee then has a contention that the transfer as such occurs only after the three year period, on which there could be sale discerned and tax could be only on the goods, the value of which is available in the schedule to the contract. We see from the application in Form No.24, as produced by the learned Government Pleader across the bar, that the clarification sought was "Whether turnover involved is a right to use or works contract ?". We do not think t....