Case Law Details
In re Mannarai Common Effluent Treatment Plant Private Limited (GST AAR Tamilnadu)
Introduction: The GST Advance Ruling Authority of Tamilnadu took a significant decision on the classification of supply outputs by Mannarai Common Effluent Treatment Plant Private Limited (CETP). Two pivotal questions were addressed: the correctness of the supply of outputs classification as the sale of goods and the proper categorization of the water sold.
Detailed Analysis
1. Classification of Supply Outputs as Sale of Goods
The core issue here is the mode of operation. Mannarai CETP’s approach of purchasing raw effluent, treating it, and then selling the resultant products has been challenged. Drawing from the Supreme Court’s observations in State Of Madras vs Gannon Dunkerley & Co.,(Madras) 1958, a sale necessitates a contract, money consideration, and actual transfer of property in goods. The classification of treated water, salt, and other products as the sale of goods is accurate only if the applicant adheres to the Sale of Goods Act and the observations of the Supreme Court.
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