ERNAKULAM DISTRICT ROLLING SHUTTER Vs. COMMISSIONER

JUDGEMENT

(1.) THIS is an appeal filed under Section 62 (1) of the Kerala Value added Tax Act, 2003 (hereinafter called "the Act") read with Rule 80 (1) of the Kerala Value Added Tax Rules, against the order of clarification issued by the Commissioner of Commercial Taxes under section 94 of the Act. The appellant is an association whose members are engaged in fabrication, supply and installation of rolling shutters. The appellant claimed that work involved namely, fabrication and installation of rolling shutters for the customers is works contract which entitle them for payment of tax at compounded rate under section 8 (a) (i) of the KVAT Act. The Commissioner, however, vide annexure-V order clarified that fabrication and installation of rolling shutters is taxable under Section 6 (1) (e) read with Section 6 (1) (d) of the Act at the rate of 12. 5%. It is against this order appeal is filed by the appellant. We have heard counsel for the appellant and government Pleader appearing for the respondents.

(2.) COUNSEL for the appellant has relied on decision of the Madras high Court in M/s. VINAYAGA ENGINEERING WORKS V. STATE of TAMIL NADU (2008-09 (14) TNCTJ 238 and contended that the transaction involved is works contract and therefore, the turnover cannot be assessed under sub-clause (e) read with (d) of Section 6 (1) of the Act as held by the Commissioner. Government Pleader on the other hand relied on decision of the Supreme Court in STATE OF A. P. V. KONE ELEVATORS (INDIA) LTD. (2005) 3 SCC 389 and in hindustan SHIPYARD LTD. V. STATE OF A. P. (2000) 6 SCC 579 and contended that fabrication and installation of rolling shutters is nothing but sale of goods which will attract tax at the rate of 12. 5% as held by the Commissioner in the impugned order. Section 6 (1) which is the charging Section under the KVAT Act is as follows:

(3.) IN fact, the Commissioner has partly held the issue in favour of the appellant by holding that fabrication and installation of rolling shutters is a works contract. However, by relying on clauses (e) and (d) quoted above, the Commissioner has held that rate of tax applicable is 12. 5%. Therefore, the question to be considered is whether the appellant's claim of rate of tax under Section 8 (a) is tenable or not. Section 8 of the KVAT Act provides for payment of tax at compounded rate, which under clause (a) provides for payment of tax at compounded rate in respect of works contract as follows: