Case Law Details
Power Grid Corporation of India Ltd. Vs Assessing Authority Sales Tax Circle D Jammu (Jammu and Kashmir High Court)
Jammu and Kashmir High Court held that mere transfer of right to use any goods or even transfer of goods to be used in works or not shall not be a ‘sale’ unless it is supported by consideration.
Facts- M/s. Power Grid Corporation of India Ltd. (the assessee) is a Government of India undertaking engaged, inter alia, in establishing its own grid stations and laying wires for transmission of electricity. It is in the execution of its aforesaid works, the assessee purchased some goods, material and machinery etc. from outside the State.
The assessee has taken registration under the Central Sales Tax, 1956. The modus operandi adopted by the assessee for construction of its grid stations and laying wires etc. for transmission of electricity indicates that it first buys goods, material and requisite machinery from outside the State and thereafter hands over the same to the contractors for consumption, fixation and laying out in the works of the assessee. As is claimed, the ownership and possession of the property used in execution of the works of the assessee remains with it and the contractors are only engaged to execute the work on payment of labour charges. It is the specific case of the assessee that since no property in goods is transferred to the contractors, as such, no payment against such material handed over to the contractors, to be used in the execution of works of the assessee, is charged. It is, thus, claimed that since the assessee was not making any local sales under the GST Act, as such, was not initially registered under the Act.
However, in compliance to the notice, the assessee appeared before the Assessing Authority and on the advice of the later, it filed the returns with nil turnover.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
