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2010] New Model Industries (P.) Ltd. v. State of Punjab (Punj. & Har.) 223
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chassis as per design, specifications and seating capacity supplied by its
customers. It also undertook repair work and resale of iron and steel. In
the course of assessment, the assessing authority came to the conclusion
that there was sale of motor vehicle bodies and the transactions were not
of work contract as claimed by the assessee. It was further held that the
sales were carried out within the State and, thus, liable to sales tax.
Accordingly, demand towards tax was raised and penalty under section
10(7) was also imposed. The appeal preferred by the assessee was dismissed
by the appellate authority. On second appeal, the Tribunal held that
the assessee was liable to pay tax, however, it set aside the penalty order.
On appeal :
HELD
In view of the decision of the Supreme Court in the case of CCT v. M.G. Bros.
[1975] 35 STC 24, it was to be held that the Tribunal was justified in holding
that the erection of body on the chassis would amount to sale. [Para 8]
Further, there were categorical findings recorded by the Tribunal that the
agreement stipulated fabrication of bus bodies on the chassis which were
supplied by the Haryana Roadways to the assessee. A fixed price was to be
realized for each of the bus body to be fabricated on the chassis and no
material for fabrication of bus body was to be supplied by the Haryana
Roadways. Accordingly, the Tribunal on the basis of facts had concluded
that there was no other possible construction except to infer that there was
sale within the State of Punjab, which was liable to tax especially when the
assessee had obtained ‘D’ Forms from Haryana Roadways as was mandatory
in case of sale made to the Government Department which was
chargeable to tax at lower rate. [Para 10]
On the issue of inter-State sale, the Tribunal had opined that even if the
contention raised by the assessee was accepted and it was treated as an
inter-State sale on account of movement of goods from Punjab to Haryana
still the fact remained that the tax was assessable at the rate of 4 per cent
which had been charged by the respondent State. Accordingly, the Tribunal
had concluded that no useful purpose would be served by remanding
the matter for fresh assessment, especially when the assessee did not show
the transaction to be an inter-State sale. Therefore, it was opined that there
would be no tax effect on the assessee in the facts and circumstances of the
case. Accordingly, while leaving the question of law open, instant appeal
was to be dismissed. [Para 11]
CASE REVIEW
CIT v. M.G. Bros. [1975] 35 STC 24 (SC) (para 8) followed.
CASES REFERRED TO
State of Gujarat v. Variety Body Builders [1976] 38 STC 176 (SC) (para 7), CCT v.
M.G. Bros. [1975] 35 STC 24 (SC) (para 8) and State of Punjab v. Himachal
Government Timber Depot [1985] 58 STC 265 (Punj. & Har.) (para 9).
GOODS & SERVICES TAX CASES ❑ JANUARY 20 - FEBRUARY 4, 2010 ◆ 99