CAV JUDGMENT

(Per : HONOURABLE MR.JUSTICE J.M.PANCHAL)

The Gujarat Sales Tax Tribunal at Ahmedabad has referred the following question of law under Section 69 of the Gujarat Sales Tax Act, 1969, for the opinion of this Court.

“Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the applicant’s works contract for fabrication and installation of air-conditioning plants falls under Entry 2 and, therefore, taxable at the rate of 15% and not under Entry 5 under which it is taxable at the rate of 5%, of the Schedule to the notification dated 18-10-93 issued under Section 55A of the Gujarat Sales Tax Act, 1969?

2. The facts emerging from the record of the case, which have necessitated the reference of the above mentioned question of law for the opinion of this Court, are as under:

2.1 M/s.Voltas Limited is a company incorporated under the provisions of the Companies Act, 1956. It is registered as a dealer under the provisions of the Gujarat Sales Tax Act, 1969 (“the Act” for short).

The company, amongst other activities, is engaged in the business of carrying out jobs involving design, supply and installation of air-conditioning plants, which are treated by the company as indivisible works contracts. Earlier, the different rates of tax on sale of goods involved in execution of works contracts, as set out in Part-A of Schedule II-A of the Act, were as under:

2.2 Section 55A of the Act empowers the Commissioner to permit a dealer to pay at his option in lieu of the amount of tax leviable from him under Section 7 or Section 8, a lump sum tax by way of composition at the rate or the rates as may be fixed by the Government by notification in the official gazette having regard to the incidence of tax on the nature of the goods involved in the execution of total value of the works contract. In exercise of powers conferred by Section 55A of the Act, the Government of Gujarat issued Notification dated October 18, 1993 ("the notification" for short), which was as under:

G.N.F.D.No.(GHN-28)GST-1093-S.(55)(A)TH dtd. 18/10/93. In exercise of powers conferred by Section 55A of the Gujarat Sales Tax Act, 1969 (Guj. 1 of 1970), the Government of Gujarat hereby fixes the rate of composition payable in lieu of the amount mentioned in Column (3) of the schedule here to in respect of each works contract shown in column (2) of the said schedule, having regard to the incidences of the tax on the nature of goods involved in the execution of total value of the works contract.