Kerala High Court
M/S. Schindler India (P) Ltd vs The State Of Kerala on 16 November, 2020
Bench: K.Vinod Chandran, T.R.Ravi
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN
&
THE HONOURABLE MR.JUSTICE T.R.RAVI
MONDAY, THE 16TH DAY OF NOVEMBER 2020 / 25TH KARTHIKA, 1942
O.T.Rev.No.209 OF 2015
AGAINST THE ORDER IN TA(VAT) NO.621/2012 DATED 22.05.2015
OF KERALA VALUE ADDED TAX APPELLATE APPELLATE TRIBUNAL, ERNAKULAM
REVISION PETITIONER/ APPELLANT/APPELLANT/ASSESSEE:
M/S. SCHINDLER INDIA (P) LTD.,
41/3264, IST FLOOR, P.C.CHAMBERS,
BANERJI ROAD, COCHIN.
BY ADV. SMT.K.LATHA
RESPONDENT/ RESPONDENT/RESPONDENT/REVENUE:
THE STATE OF KERALA,
REPRESENTED BY SECRETARY TO GOVERNMENT,
TAXES DEPARTMENT, SECRETARIAT,
THIRUVANANTHAPURAM.
BY SENIOR GOVERNMENT PLEADER SRI.MOHAMMED RAFIQ.
THIS OTHER TAX REVISION (VAT) HAVING BEEN FINALLY HEARD ON
16-11-2020, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:
O.T.Rev.No.209 of 2015 - 2 -
K. Vinod Chandran & T.R.Ravi, JJ.
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O.T.Rev.No.209 of 2020
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Dated, this the 16th day of November, 2020
ORDER
Vinod Chandran, J.
Two contracts for supply and installation of Escalators with two different entities; one covering supply and installation of 8 and the other 2 Escalators. Whether the appellant-assessee was involved in the installation only, the charges of which are excluded under the Kerala Value Added Tax Act, is the issue arising.
2. The brief facts are that the appellant is a registered dealer within the State and has its Principal in China. The two entities referred to above entered into contracts for supply and installation of Escalators with the appellant; the documents of one of whom are produced here. Presumably, the terms and procedure adopted with respect to the other was also identical.
3. The question of law arising is modified and re-framed as follows:
Whether the contract entered into between the appellant and the two entities were for installation of the Escalators and in the event O.T.Rev.No.209 of 2015 - 3 - of the import having been carried out by the two entities, could there be tax levied for the price of the Escalators as such?
4. The statutory authorities, including the Tribunal, found against the assessee. The Tribunal looked into the contract to specifically find that it was one for supply and installation. Though the Bill of Entry, Bill of Lading etc. were filed by the entities who had purchased the Escalators, till its installation the goods remained the property of the appellant. The import was also found to have been made for and on behalf of the appellant and not the purchasers.
5. In Annexure-A, the offer made by the appellant, the registered dealer within the State, is for the supply and installation of S9300 Advanced Edition Escalator with Micro Processor Based Controller. The contract too was entered into as per Annexure-A, the relevant portion of which was extracted by the Tribunal in its order. The financial terms as seen from Annexure-A indicates the total price for 8 Escalators to be Rs.1,31,00,185/-. This includes the installation charges. Under the Commercial Terms and Conditions, paragraph 10 has the heading 'Transfer of Property'. This clause indicates that the O.T.Rev.No.209 of 2015 - 4 - Escalator would remain the undisputed property of the appellant till full payment is received. It also empowers the appellant to dismantle the escalator and take the materials back to their possession on failure to make the payment. It also clearly stipulates that any unused material, packing material after completion of the job shall remain the property of the appellant who has the absolute right to take possession of such material. It is true that the Bill of Entry, Bill of Lading, etc. have been filed by the purchaser. However, that is as per paragraph 1 of Annexure-A, which enables the import of the Escalators directly by the purchaser. The clause with respect to transfer of property however, evidences that though the purchaser imported the Escalators, the title to the goods remained with the appellant. The invoice (Annexure-B) issued by the appellant for installation and commissioning charges describes the contract as one for supply, installation and commission.
6. We are of the opinion, on the specific facts, that the question of law has to be answered against the assessee. The contract, which the Tribunal found to be a works contract, would result in the transfer of property only at the time of accretion of goods in the works; that O.T.Rev.No.209 of 2015 - 5 - is, at the time of installation and till then, as per the terms of the contract, the materials remained the property of the appellant. We hence reject the revision, leaving the parties to suffer their respective costs.
Sd/-
K.VINOD CHANDRAN JUDGE Sd/-
T.R.RAVI JUDGE Vku/-
APPENDIX PETITIONER'S/S ANNEXURES:
ANNEXURE A THE TRUE COPY OF THE AGREEMENT EXECUTRD BY THIS APPELLANT WITH MALABAR CASTLES PVT. LTD., RAM MOHAN ROAD, CALICUT SIGNED DATED 24.04.2006 ANNEXURE B THE TRUE COPY OF THE BILL OF LADING DATED 11.09.2006 AND THE INVOICE ISSUED BY SCHINDLER (CHINA) ELEVATOR COMPANY LTD IN THE NAME OF MALABAR CASTLES PVT. LTD, 2ND SEPTEMBER 2006 AND THE TRANSPORT INSURANCE CERTIFICATE DATED 11TH SEPTEMBER 2006 AND THE TR 6 CHALLAN NO.99049396 DATED 12.10.2006 FOR PAYMENT OF IMPORT DUTY BY MALABAR CASTLES PVT. LTD AND THE BILL OF ENTRY FOR CONSUMPTION ANNEXURE C THE TRUE COPY OF THE ASSESSMENT ORDER ISSUED BY THE COMMERCIAL TAX OFFICER (AA)O/O THE DEPUTY COMMISSIONER (AA), COMMERCIAL TAXES DEPARTMENT, ERNAKULAM TO THE APPELLATE DATED 30.07.2008.
ANNEXURE D THE TRUE COPY OF THE FIRST APPELLATE ORDER ISSUED BY THE DEPUTY COMMISSIONER (APPEALS), ERNAKULAM TO THE APPELLANT IN KVATA 657/2009 DATED 31.01.2012 ANNEXURE E THE TRUE COPY OF THE SECOND APPEAL IN FORM NO.31 ALONG WITH GROUNDS OF APPLICATIONS AND ADDITIONAL GROUNDS OF APPEAL 2006-2007 FILED BY THE APPELLANT BEFORE THE KERALA VALUE ADDED TAX APPELLATE TRIBUNAL, ERNAKULAM ANNEXURE F THE CERTIFIED COPY OF THE APPELLATE ORDER IN TA(VAT) NO. 621/2012 ISSUED BY THE KERALA VALUE ADDED TAX APPELLATE TRIBUNAL, ERNAKULAM DATED 22.05.2015 [TRUE COPY]