M/S Power Grid Corporation Of INDIA LTD vs. Assessing Authority Sales Tax Circle D Jammu

Held

The Court answered the first question in the negative, holding that the transaction where the assessee supplied goods and material purchased from outside the State against C-Forms to contractors for erecting transmission lines, sub-stations, and power grids for itself did not amount to a 'sale' as defined under Section 2(L) of the GST Act during the relevant period. Consequently, it was not exigible to sales tax, and the assessee was not a dealer liable to pay tax in respect of these transactions. Regarding the second question, the Court held that the Tribunal, and all subordinate authorities, are bound to follow the law laid down by the Tribunal to maintain judicial discipline and avoid uncertainty. Deviations are permissible only if there is a change in law or fact situation, and such deviations must be justified with reasons. The Assessing Authorities and Statutory Appellate Authorities cannot take a view contrary to the Tribunal's rulings without proper justification, as such conduct amounts to gross impropriety and indiscipline. The references were answered accordingly.

Facts

M/s Power Grid Corporation of India Ltd. (the assessee), a PSU, purchased goods and machinery from outside the State and handed them over to contractors for use in its grid station and transmission line projects. The assessee claimed ownership and possession remained with it, with contractors only receiving labour charges. The Assessing Authority, noting the assessee's CST registration and use of C-Forms, deemed it a dealer liable for GST on these transactions, imposing tax, interest, and penalty for accounting years 1996-97 to 2001-02. Appeals to the Appellate Authority provided partial relief. The assessee then appealed to the Sales Tax (Appellate) Tribunal. The Tribunal held that the transactions constituted a sale under the GST Act, but set aside penalty and interest. The assessee sought a reference to the High Court.

Key Issues

1. Whether, on the facts and circumstances, the applicant supplied 'goods' as defined under Section 2(h)(ii) and 2(h)(iv) of the GST Act, which were deemed a sale before 15.05.1997 under Section 2(L), making the applicant a dealer amenable to tax? - Petitioner's argument: The assessee argued that handing over goods to contractors for use in self-works did not constitute a transfer of property in goods, hence no sale occurred. They contended that no project was completed by contractors during the material supply period and that they were not executing works contracts. They also argued that there was no sale of goods to themselves. - Revenue's argument: The revenue contended that the assessee's registration under the CST Act and use of C-Forms indicated it was a dealer importing goods for personal use, and thus liable for tax. The Tribunal's view was that the utilization of goods in works contracts, whether divisible or indivisible, constituted a sale. 2. Whether the Tribunal was bound by its earlier orders in the applicant's own cases on the principle of consistency?