Allowed

M/S Kone Elevator India Private Limited v. the State of Assam and Ors.

Gauhati HC5 Apr 2018WP(C)/370/2010

Case brief

AI extract

What is this about?

The Gauhati High Court held that the petitioner, a works contractor relying on Composition Scheme, was wrongly denied tax benefit previously granted. The Court quashed Circular No.11/2009 issued by the Commissioner of Taxes, which relied on an overruled Supreme Court precedent regarding the nature of elevator transactions, and directed the Assistant Commissioner to permit the composition tax payme

What did the court decide?

Quashing of Circular No.11/2009 and direction to the Assistant Commissioner of Taxes to allow the petitioner to pay the composition amount.

M/S Kone Elevator India Private Limited Vs the State of… — Banking and Recovery | Gauhati HC (2018)

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Page No.# 1/3

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GAHC010163832010

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THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

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Case No. : WP(C) 370/2010

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1:M/S KONE ELEVATOR INDIA PRIVATE LIMITED INDIAN BANK BUILDING 1ST FLOOR, BELTOLA TINIALI, GUWAHATI781028.

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VERSUS

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1:THE STATE OF ASSAM AND ORS REPRESENTED BY THE COMMISSIONER AND SECRETARY, TO THE GOVT. OF ASSAM, FINANCE TAXATION DEPARTMENT, DISPUR, GUWAHATI781006. 2:THE ASSISTANT COMMISSIONER OF TAXES UNIT- D KAR BHAWAN COMPLEX G.S. ROAD DISPUR GUWAHATI-6.

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3:THE DEPUTY COMMISSIONER OF TAXES ZONE- C KAR BHAWAN G.S. ROAD DISPUR GUWAHATI-6.

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4:THE COMMISSIIONER OF TAXES ASSAM KAR BHAWAN G.S. ROAD DISPUR GUWAHATI-6

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Advocate for the Petitioner : MR.R K JOSHI

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Page No.# 2/3

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Advocate for the Respondent : MR.D SAIKIA

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BEFORE

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HON’BLE THE CHIEF JUSTICE MR. AJIT SINGH HON’BLE MR. JUSTICE MANOJIT BHUYAN

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5.4.2018

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(Ajit Singh, C.J.)

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Mr.RK Joshi, learned counsel for the petitioner.

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Mr.D Saikia, learned Senior Additional Advocate General, Assam, assisted by Mr.B Choudhury, learned Standing Counsel, Finance for the Respondents.

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The petitioner is a registered dealer under the Assam Value Added Tax Act, 2003 ( in short “Act”) and engaged in the execution of work contract viz. design, manufacture, erection and commission of elevators (lift) at different places within the State of Assam. Being a works contractor, it opted to pay the composition amount under the Composition Scheme for Works Contract at the rate of 4% in lieu of tax payable under the aforesaid Act.

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The Assistant Commissioner of Taxes, Unit-D (Respondent No.2) also permitted the petitioner to avail the said benefit for the years 2005-2006, 2006-2007, 2007-2008 and 20082009. This permission was granted on annual basis and, therefore, on the expiry of the period for 2008-2009 on 31.3.2009, the petitioner on 1.4.2009 exercised its option for payment of the composition amount for the next year ending on 31.3.2010.

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Page No.# 3/3

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But the Assistant Commissioner of Taxes informed the petitioner that it was not eligible for the permission, sought for, as the transactions undertaken by it in course of execution of its works constitute sale of the elevators (lift), for which, it was liable to pay tax under the Act. This stand of the Assistant Commissioner was apparently based on a Circular No.11/2009 dated 30.4.2009 issued by the Commissioner of Taxes, Assam, relying on the decision of the Supreme Court in State of Andhra Pradesh vs. Kone Elevators (Indian) Limited (2005) 140 STC 22(SC).

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Admittedly, the decision of the Supreme Court in State of Andhra Pradesh vs. Kone Elevators (Indian) Limited (supra) has later been overruled by a constitution Bench of the Supreme Court in Kone Elevator Indian Private Limited vs. State of Tamil Nadu (2014) 7 SCC 1. This being the situation, the very foundation of Circular No.11/2009 dated 30.4.2009 does not survive. We, accordingly, quash the Circular and direct the Assistant Commissioner of Taxes to allow the petitioner to exercise its option for payment of composition amount, as provided under law.

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With the above direction, the petition is allowed.

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Sd/Sd/-

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JUDGE CHIEF JUSTICE

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Comparing Assistant

M/S Kone Elevator India Private Limited v. the State of Assam and Ors.

Case brief

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M/S Kone Elevator India Private Limited v. the State of Assam and Ors.

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