Disposed

M/s. Carrier Air - Conditioning and Refrigeration Ltd., v. Joint Commissioner ( Ct ) Legal )

Telangana HC1 Feb 2010WP/1541/2010

Case brief

AI extract

What is this about?

The High Court granted a temporary reprieve on disputed tax liability regarding air-conditioning supplies and maintenance. The court held the substance of the tax appeal is pending before the STAT, the final authority, hence it will not adjudicate on the merits but directed respondents to refrain from coercive recovery steps pending deposit of 50% of the disputed tax.

What did the court decide?

Directs respondents not to take coercive steps for recovery of disputed tax on condition of depositing 50% of the disputed tax within four weeks.

M/s. Carrier Air - Conditioning and Refrigeration… — GST and Indirect Tax | Telangana HC (2010)

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THE HONOURABLE SRI JUSTICE GODA RAGHURAM

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AND

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THE HONOURABLE SRI JUSTICE RAMESH RANGANATHAN

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W.P.NO.1541 OF 2010

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01-02-2010

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BETWEEN;

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M/s.Carrier Air-Conditioning & Refrigeration Ltd., Hyderabad

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...Petitioner

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vs.

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Joint Commissioner (CT) Legal, Hyderabad and two others

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...Respondents

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THE HONOURABLE SRI JUSTICE GODA RAGHURAM

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AND

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THE HONOURABLE SRI JUSTICE RAMESH RANGANATHAN

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W.P.NO.1541 OF 2010

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ORAL ORDER: (Per RR,J)

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The petitioner is a registered dealer on the rolls of the Assistan Commissioner (CT) LTU, Begumpet Division and is engaged in th business of sale and supply of air conditioners and execution of work contract of air-conditioning systems. For the assessment year 2004-0 they were assessed to tax by the 3^rd respondent. The 2^nd responden issued a revision show cause notice under Section 20(2) of th A.P.G.S.T.Act, 1957 treating the supply of air-conditioning systems as sal and not execution of works contract. As against the 8% tax paid by th petitioner, they were directed to pay tax at 16%. The revisional authorit treated the annual maintenance of air-conditioning system as an electrica contract under sub-entry (V) of entry (a) of Rule 6(3)(ii) of the APGS

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Rules and allowed deduction towards labour charges @ 25%.

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Aggrieved thereby, the petitioner preferred an appeal to the Sales Ta Appellate Tribunal in TA No.652 of 2009 which is stated to be pending a on date. They also filed a petition before the 1^st responden seeking stay of collection of the disputed tax pending disposal of th appeal by the STAT. The 1^st respondent, by his order dated 08-01-2010 rejected the stay petition holding that the transactions of supply installation, testing and commissioning of ductable split air conditioner were contracts of sale and not works contracts because the predominan element in such transactions was supply of goods and the labour involve in errection and commissioning of air conditioning systems was onl incidental. With regards determination of the taxable turnover on annua maintenance contracts, the 1^st respondent distinguishes the order o Tribunal in M/s Sri Ram Refrigeration Industries Ltd., Vs. State of A.P. (3 APSTJ 113) and held that the said order of Tribunal related to repairing o compressors and not maintenance of air conditioning systems.

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Before us Sri J.V.Rao, learned counsel for the petitioner, would subm that the petitioner had paid 16% tax on sale of window and split a conditioners on a turnover of Rs.13,62,63,424/-; the turnover relating t execution of works contract was Rs.6,24,93,623/-, it was evident from th invoices, filed both before the revisional authority and the 1^st responden that these works were essentially in the nature of execution of work contract and not sale of air-conditioners; the petitioner was entitled to 30% deduction towards labour charges on the annual maintenance contracts o air-conditioners as it fell under “all other contracts” under Rule 6(3)(ii)( and not “electrical contracts” under Rule 6(3)(ii)(v). While the contentions urged before us by Sri J.V.Rao, the Learne counsel for the petitioner, cannot be said to be without merit, we do no propose to adjudicate thereupon since the substantive appeal is pendin before the STAT which is the final fact finding authority under the Act. W consider it appropriate, therefore, to direct the respondents not to take an coercive steps for recovery of the disputed tax on condition that th petitioner deposits 50% of the disputed tax with the 3^rd respondent within period of four (4) weeks from today. The amount, if any, already pai

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towards the disputed tax shall be given credit to. In case the petitione does not comply with this order within the time stipulated hereinabove th order passed by us shall stand automatically vacated and the respondent would be at liberty to recover the disputed tax in accordance with law.

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The writ petition is disposed of as above at the stage of admission. N order as to costs.

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______________ GODA RAGHURAM,J

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__________________

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RAMESH RANGANATHAN,J

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1^st FEBRUARY 2010.

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TSNR

M/s. Carrier Air - Conditioning and Refrigeration Ltd., v. Joint Commissioner ( Ct ) Legal )

Case brief

What is this about?

What did the court decide?

M/s. Carrier Air - Conditioning and Refrigeration Ltd., v. Joint Commissioner ( Ct ) Legal )

Case brief

What is this about?

What did the court decide?

What the court decided

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