TaxTMI 
TaxTMI 
2019 (3) TMI 24
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.... essentially was awarded by the Greater Cochin Development Authority [for brevity "GCDA"] for the purpose of installing chairs for the spectators in a sports stadium constructed by it. The assessee contended that it is a works contract and that the transfer was not in the form of goods. They had purchased steel, carried out fabrication work on it and then fixed the plastic mould of chair on the fabricated frames to form a row of seats; which were installed in the stadium by screwing it on to the construction. 3. Sri.K.N.Sreekumar, learned Counsel appearing for the assessee, would contend that the works contract was installation of non-marketable products, which installation work awarded by the GCDA involved fabrication work, plastic moulding works, fixing them together and then screwing it to the construction, i.e., the stadium. Sri.Shamsudheen, again based on the agreement, would contend that the description of the work in the agreement alone would indicate that it is in the form of goods, whether it is marketable or not. What was provided were plastic chairs fixed in steel frames which are goods simpliciter, is the compelling argument. 4. Sri.Shamsudheen relies on the decis....
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.... is cited first, above. Sri.Shamsudheen though, would point out that the Division Bench despite having applied Kone Elevators (India) Ltd. [(2005) 3 SCC 389], also found that in the case of a rolling shutter the goods which are fixed is only a rolling shutter and the side panels and its head containing rolling rod. 9. According to us the further observations made in the judgment would not help the State, since essentially the decision was rendered finding Kone Elevators (India) Ltd. [(2005) 3 SCC 389] to be applicable squarely to the facts of the case in EDRSF Association. The reliance placed by the State, is on the further observation by the Division Bench that in the case of elevators there are a variety of goods while in the case of rolling shutter the goods are the rolling shutter, side panels and the rolling rod. Going by the later decision of the larger Bench of the Hon'ble Supreme Court, we have to find that the decision as to the transfer being in the form of goods or not does not depend upon the complexity of the work involved or the large variety of goods that are used in the works. B. Narassamma also held that what is pertinent is the examination whether the ident....
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....are the components of the lift which are eventually installed at the site for the lift to operate in the building. In constitutional terms, it is transfer either in goods or some other form. In fact, after the goods are assembled and installed with skill and labour at the site, it becomes a permanent fixture of the building. Involvement of the skill has been elaborately dealt with by the High Court of Bombay in Otis Elevator (1969) 24 STC 525 (Bom) and the factual position is undisputable and irrespective of whether installation is regulated by statutory law or not, the result would be the same. We may hasten to add that this position is stated in respect of a composite contract which requires the contractor to install a lift in a building. It is necessary to state here that if there are two contracts, namely, purchase of the components of the lift from a dealer, it would be a contract for sale and similarly, if separate contract is entered into for installation, that would be a contract for labour and service. But, a pregnant one, once there is a composite contract for supply and installation, it has to be treated as a works contract, for it is not a sale of goods/chattel simplici....
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....red. We will a bit later, notice the distinction, insofar as the facts as found by the Tribunal in the present case. But before that, we have to understand B.Narasamma. 12. B.Narasamma, dealt with use of declared goods, which were so declared to be goods of special importance under Section 14 of the Central Sales Tax, Act. The goods were steel rods which were used in reinforcement of cement thus eventually forming a part of the pillars, beams and roofs of buildings. The State sought to tax the work as a works contract involving transfer not in the form of goods and thus levying sales tax on the accretion of steel rods in the works. The Hon'ble Supreme Court first observed that: "First, that works contracts that are liable to be taxed after the 46th Constitution Amendment are subject to the drill of Article 286(3) read with Section 15 of the Central Sales Tax Act, namely, that they are chargeable at a single point and at a rate not exceeding 4% at the relevant time. Further, the point at which these iron and steel products are taxable is the point of accretion, that is, the point of incorporation into the building or structure". On this observation, the Court exam....
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....3. In the present case, what we have to look at is the contract which was specifically looked into by the Tribunal. We hereunder extract the description of work as seen from the agreement schedule, which has been extracted by the Tribunal also, in its order: "Providing and fixing superior quality PVC out door stadium chairs or equivalent material as approved by departmental Engineers of size 500 x 450 x 400 mm. or nearest size, fixing the chairs on stainless steel frame work including all fabrication work with 40 mm (outer dia.) 16 gauge verticals 3 Nos., fixed on 75 x 8 mm. flat or nearest, screwed to pre-cast seating element with 75 x 8 mm. stainless steel screws, horizontal support of 25 mm. outer dia pipes 16 gauge 2 Nos., mounted on 50 x 8 mm. flat or nearest, 5 Nos. chairs fixed to frame with stainless steel screws including welding grinding, polishing and closing the outer ends of pipes with stainless steel flanges etc. complete as per direction of departmental engineers. (Steel materials grade 304 shall be used). The stainless steel bolt shall be properly anchored. Rates are inclusive of all materials, labour charges and conveyance, VAT etc. complete. The centre to....