Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Andhra Pradesh General Sales Tax Act |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Andhra Pradesh General Sales Tax Act, 1957; Ss. 2(1)(n) & (t), 5F and 5G, Entry 82 of the First Schedule to the Act : Contract for sale and installation of lifts between assessee/seller and customer-levy of sales tax-Deductions towards labour charges-Claim of -Held: Claim of the deductions depends upon the terms/nature of contract-True effect of an accretion made pursuant to a contract could be judged from the intention of the parties-Transfer of Property and delivery of possession is the essence of contract for sale but the essence of contract for works is work and labour-Thus, it is substance and not the form of the contract which is material in determining the nature of a contract-Onus of preparation and making the site ready for installation of lift is on customer but major component of the end product supplied by the assessee-Hence, the contract in question is contract for sale and not a works contract-Section 5G of the Act not attracted-Deductions of labour charges not allowed. The questions which arose for determination in this appeal were as to whether contracts entered into and executed by the assessee, manufacturer of lifts and elevators, were contracts for sale or works contract and to determine assessee's claim of deductions of labour charges under Section 5G of the Andhra Pradesh Sales Tax Act. It was contended by the appellant-State that the main object of the contract in question was selling of the lifts and installation work was only incidental to the main contract; and that the High Court erred in holding that the installation of the lift involved skill and technical know-how and thus could appropriately be treated as works-contract. Respondent-company submitted that they were engaged in the manufacture, supply, erection, installation and commissioning of lifts by undertaking works-contract; that installation and commissioning of lifts involved skill and only after installation and commissioning of the lifts, the ownership in the lifts is transferred to the customer. The assessee became entitled for deduction of labour charges from sales tax in terms of Section 5G of the Act; and that since contract in question satisfies requirements of works-contract, Section 5F of the Act is attracted. |
Judge | Honble Mr. Justice S.H. Kapadia |
Neutral Citation | 2005 INSC 81 |
Petitioner | State Of Andhra Pradesh |
Respondent | M/s. Kone Elevators (india) Ltd. |
SCR | [2005] 2 S.C.R. 152 |
Judgement Date | 2005-02-17 |
Case Number | 6585 |
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