- (1.) THIS revision has been filed against the order of the Commercial Tax Tribunal dated 28.07.2014.
(2.) BRIEFLY stated the facts are that M/s Otis Elevators Company Ltd. is a Public Ltd. Company registered under the U.P. Vat Act, 2008 (hereinafter referred to as the Act, 2008) and is engaged in the business of manufacturing of parts and components of lifts and elevators in offices, residential buildings, Government buildings etc. Assessment proceedings were initiated in respect of the Company for the year 2010 -11. For purposes of carrying out the orders for supplying of lifts, elevators, the Head Office of the Company situate in Mumbai executes works contract for supply of parts and components of lifts/elevators and to provide services for erection, commissioning and installation of the same. The standard works followed by the revisionist Company is that it is only after entering into an agreement with the customer, that the activity of manufacturing of parts/components of lifts/elevators is carried out by the Company at its factory situate in Karnataka. The works contract provides for procurement and supply of all the component parts whether manufactured or bought from other manufacturers or imported and stored at the revisionist's Maharashtra Warehouse and involves a series of complex engineering activities such as template, plumbing, rails, designing, fixing platform and assembling car enclosure and accessories, checking continuity of safety link circuit, removing all shorting and start up, cleaning and painting, adjustment for balancing safety etc., which is undertaken for the erection, commissioning and installation of a functional elevator which is fully integrated into the structure in question.
(3.) THE short point which, therefore, arises in the present revision for consideration of the Court is whether the works contract entered into between the revisionist Company and a customer is a sale contract or a works contract. The assessing authority, Deputy Commissioner of Commercial Tax for the assessment year 2010 -11 (VAT) relying upon a decision of the Supreme Court in the case of State of Andhra Pradesh Vs. Kone Elevators, 2005 140 STC 22 has held the works contract to be a sale contract on the ground that all the material utilized in the material and parts of a lift are assembled and kept in the godown and are transported to the site after the parties enter into a contract and it is not that the lift or its parts are manufactured after the execution of the contract. The assessing authority has therefore imposed a total demand of Rs. 5,64,76,626/ -. Aggrieved by the order of the assessing authority, the revisionist -Company filed an appeal before the Additional Commissioner (Appeals), who by his order dated 05.06.2014 has stayed the demand under the assessment order to the extent of 50% but directed the revisionist to deposit the remaining 50% amount within 30 days. The revisionist being aggrieved next filed the appeal before the Commercial Tax Tribunal and the Tribunal modified the order of the Additional Commissioner (Appeals) and granted stay to the extent of 80% of the total demand on the furnishing of security and remaining 20% was required to be deposited within 30 days.;