Case Law Details
Case Name : M/s. Kone Elevator India Pvt. Ltd. Vs State of Tamil Nadu and Ors. (Supreme Court of India)
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Supreme Court of India
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Supply and Installation of Lifts is a Works Contract ; SC explains distinction between contract for sale of goods and works contract
The Constitution bench of the Supreme Court in the case of M/S. Kone Elevator India Pvt. Ltd. vs. State of Tamil Nadu and Ors. (Writ Petition (C) No. 232 OF 2005) vide its order dated 6.5.2014 has overruled the decision of the three-Judge bench in the case of State of A.P. v. Kone Elevators (India) Ltd, reported at (2005) 3 SCC 389.
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Author Bio
defiantly this decision will not serve any purpose for assessee. Rather this decision will only help revenue departments in creating problems for assessee. The three important issue are still not resolved.
1. if contract is entered for supply and installation then for interstate goods who took delivery will not matter,
2. IF goods are moved from one state to another and used in same form for execution of works contract then state where goods has been installed cannot impose tax on that good
3. IF goods are moved from one state to another even against pre-existing contract then also it will fall under section 6(2) of CST act
This decision created more confusion regards works contracts.There should be vide defination or works contract needed for clear vision towards it.
15-05-2014
Distinction is o.k. But what purpose it serves? Ownership is transferred and the supplier will have continued obligation for its performance.
I am not sure about the intention behind such distinction.