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Case Law Details

Case Name : Commissioner of Value Added Tax Vs OTIS Elevator Company (India) Ltd. (Delhi High Court)
Appeal Number : ST. APPL. 1/2018
Date of Judgement/Order : 26/11/2018
Related Assessment Year :
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Commissioner of Value Added Tax Vs Otis Elevator Company (India) Ltd. (Delhi High Court)

The placement of an order by the agent for procurement of the lifts, in this case, was merely an offer. It is only upon its acceptance and further steps taken by the supplier that an offer crystallizes into a binding promise or contract. That took place in Mumbai. It is now too far well settled that the incidence of Central Sales Tax or even sale of goods, occurs where the goods are appropriated to the contract. In this case, the place where the appropriation took place, is undoubtedly Mumbai. This Court’s conclusion is also supported by a similar reasoning adopted in Thyseenkrupp Elevator (India) Private Ltd. Vs. Assistant Commissioner of Commercial Taxes & Anr. [W.P.No. 13607/2017], decided by the Karnataka High Court on 24th April 2018.


1. The question of law urged on behalf of the appellant/Government of NCT of Delhi concerns the correctness of the finding of the Appellate Tribunal, Value Added Tax, Delhi [hereafter referred to as “VAT Tribunal”] that the supply of the goods from Mumbai to Delhi to execute the works contract, did not constitute inter-state sales within the meaning of the expression under the Central Sales Tax Act, 1956.

2. The Assessee is engaged in the business of supply, erection, commissioning and installation of lifts/elevators in various classes of places including residential buildings, government offices and hospitals. It is also a registered dealer under the provisions of Delhi Sales Tax Act, 1975. It, however, has its manufacturing facilities at Mumbai, where its components are produced. The Mumbai unit also stores the products so manufactured. The Delhi Sales Tax Authorities sought to assess transactions for three distinct periods covering Assessments Years 2002-2003, 2003-2004 & 2004-2005. The Assessing Authority sought to hold that the burden of the local sales tax levy was laid upon the dealer, upon an analysis of the contracts entered into. What prevailed with the adjudicating authority was that the contracts were indivisible work contracts, title of each of the elevators passed onto the customer upon payment, and that for the purposes of dispute resolution, the Courts of Delhi had exclusive jurisdiction. The assessments were subjected to appeal; the Appellate Authority dismissed the asseessee’s contentions. Aggrieved, the assessee approached the VAT Tribunal, which by its common order set aside the orders of the First Appellate Authority. In so holding the Tribunal found that the goods were appropriated to the contract, which was concluded in Mumbai, upon acceptance of the offer/placing orders.

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