STATE OF KERALA Vs. UNITECH MACHINES LTD

JUDGEMENT

(1.) These connected revision cases are filed by the State challenging the orders of the Sales Tax Appellate Tribunal issued in the case of the respondent/assessee for the assessment years 1997-98, 1998-99 and 1999-2000.

(2.) We have heard the Government Pleader appearing for the petitioner and advocate Sri T. M. Sreedharan appearing for the respondent.

(3.) The respondent-assessee was awarded contracts for supply and installation of fire fighting equipment by Bharat Petroleum Corporation Ltd., in the NTPC power plant at Kayamkulam in Kerala. Another order of similar type was issued to the respondent by the Indian Oil Corporation for setting up of fire fighting equipment, fire protection device, etc. in their LPG bottling plant installation at Kozhikode in Kerala. The respondent, after signing the contracts with these awarding companies, set up the offices at the respective sites of the awarders at Kayamkulam and Kozhikode. The respondent also took registration under the Kerala General Sales Tax Act as well as the Central Sales Tax Act in Kerala. The question that arose in the course of assessment is whether the goods purchased and brought by the respondent from outside the State of Kerala and used for the execution of works contract represent inter-State sales to the awarders under Section 3(a) of the Central Sales Tax Act, 1956 or whether the value of the said goods should be included in the turnover on works contract assessable under the Kerala General Sales Tax Act, 1963. On the facts, it is admitted that the equipment made or fabricated outside Kerala was purchased by the respondent against the issue of C forms which obviously means that the goods were intended for resale in the State, which in this case is in the course of execution of works contract. The further finding of the Tribunal is that the awarders also treated the amounts paid to the respondent as consideration for works contract and so much so, they deducted tax at source from the bills raised by the respondent on the entire value of the contract and made payment of the balance amount only. The assessments completed treating the whole transaction as works contract were the subject-matter of the appeal before the first appellate authority before whom the respondent took the stand that the value of the goods brought from outside Kerala has to be excluded from the turnover of the works contract for the reason that the sales of those items were inter-State in nature. The first appellate authority dismissed the appeals and confirmed the assessments against which the assessee/respondent filed second appeals before the Tribunal. The appeal for the year 1998-99 was separately taken up by a Bench consisting of three members. While the majority accepted the respondent's contentions and allowed the appeal, the third member held that the assessment of the entire turnover as works contract is absolutely tenable. However, the appeals pertaining to the assessment years 1997-98 and 1999-2000 went before another Bench of the Tribunal, which, on the merits, though held against the respondent, by upholding the finding in the assessment confirmed in the first appeal, still allowed the appeals for the reason that another Bench had on earlier occasion allowed the respondent's appeal for 1998-99. The revision petitions filed by the State for the years 1997-98 and 1999-2000 are within time and the revision for 1998-99 is filed with delay. However, since we found merit in the contention of the State and since there is a dissenting order by one member of the Tribunal, we condoned the delay in filing the revision for the year 1998-99 by a separate order and entertained the same revision as well.