COMMISSIONER, DELHI VALUE ADDED TAX versus M/S. ABB LTD.

Citation: [2016] 4 S.C.R. 600 · Decided: 05-04-2016 · Supreme Court of India · Bench: DIPAK MISRA · Disposal: Dismissed
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Judgment (excerpt)

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[2016] 4 S.C.R. 600 
COMMISSIONER, DELHI VALUE ADDED TAX 
v. 
MIS. ABB LTD. 
(Civil Appeal Nos. 2989-3008 of2016) 
APRIL 05, 2016 
[DIPAK MISRA AND SHIVA KIRTI SINGH, JJ.] 
Central Sales Tax Act, 1956 - ss. 3(a) and 5(2) - Exemption 
fr01i1 taxation under Delhi Value Added Tax Act, 2004 - Import of 
goods and their movement from one State to another, by the assessee 
- Demand made under Delhi Value Added Tax Act -Assessee denied 
the liability claiming exemption from the tax as the movement of 
goods was in pursuance of a contract - Demand confirmed by the 
Assessing Officer, statutory appellate authority as well as the 
Tribunal, rejecting the claim of the assessee - High Court held that 
assessee was entitled to exemption - On appeal, held: The movement 
of goods by way of imports or by way of inter-State trade was in 
pursuance of the conditions and/or as an incident of the contract -
Hence the transactions were exempt from Delhi Value Added Tax 
Act, 2004 - Delhi Value Added Tax Act, 2004 - s.7(a) and (c). 
Dismissing the appeals, the Court 
HELD: 1. It was rightly held by the High Court that the 
inter-State movement of goods was within the contemplation of 
the parties and it can be reasonably presumed that such movement 
was to fulfill the terms of the contract and therefore the transaction 
was covered by Section 3(a) of the Central Sales Tax Act, 1956. 
Where the goods moved from one State to another as a result of 
a covenant in the contract of sale it would be clearly a sale in the 
course of inter-State trade. [Para 9) [609-C-D] 
Tata Iron and Steel Co. Ltd. v. S.R. Sarkar 1961 SCR 
379 : (1960) 11 STC 655 : AIR 1961 SC 65; Oil India 
Ltd. v. The Superintendent of Taxes 1975 (3) 
SCR 797 : (1975) 35 STC 445(SC) : 1975 (1) sec 733; 
English Electric Company of India Ltd. v. The Deputy 
Commercial Tax Officer 1977 (1) SCR 631 : (1976) 38 
STC 475 (SC) : (1976) 4 SCC 460; South India Viscose 
' 
Ltd. v. State of Tamil Nadu 1982 (1) SCR 44 : (1981) 
48 STC 232 (SC) : (1981) 3 SCC 457 - relied on. 
600 
/ COMMISSIONER, DELHI VALUE ADDED TAX v, MIS. ABB 
LTD. 
2. In view of the salient features flowing out as conditions 
in the contract and the entire conspectus· of law on the issues, 
the movement of goqds by way of imports or by way of inter-State 
trade in the case was in pursuance of the conditions and/or as an 
incident of the contract between the assessee-contractor and 
contractee. The goods were of specific quality and description 
for being used in the works contract awarded on turn key basis 
to the assessee and there was no possibility of such goods being 
diverted by the assessee for any other purpose. [Para 17] [614-
E-F] 
Mis. K.G Khosla & Co. v. Deputy Commissioner of 
Commercial Taxes, Madras (1966) 3 SCR 352 : AIR 
1966 SC 1216 - followed. 
State of Maharashtra v. Embee Corporation, Bombay 
1997 (3) Suppl. SCR 497 : 1997 (7) SCC 19; Deputy 
Commissioner of Agricultural Income Tax and Sales Tax, 
Ernakulam v. Indian Explosives Ltd. 1985 (2) Suppl. 
SCR 623 : 1985 (4) SCC 119; Indure Ltd. and Am: vs:-
CTO & Ors. 2010 (11) SCR 556 : 2010 (9) SCC 461 -
relied on. 
Mis. Binani Bros. (P) Ltd. v. Union of India & Ors. 1974 
(2) SCR 619 : 1974 (1) SCC 459 - held inapplicable. 
Case Law Reference 
(1966) 3 SCR 352 
followed 
Para2 
1974 (2) SCR 619 
held inapplicable 
Para2 
1961SCR379 
relied on 
Para9 
1975 (3) SCR 797 
relied on 
Para9 
1977 (1) SCR 631 
relied on 
Para9 
1982 (1) SCR 44 
relied on 
Para9 
1997 (3) Suppl. SCR 497 relied on 
Para 14 
1985 (2) Suppl. SCR 623 relied on 
Para 14 
2010 (11) SCR 556 
relied on 
Para 14 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2989-
601 
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3008 of2016. 
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SUPREME COURT REPORTS 
[2016] 4 S.C.R..--. 
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From the Judgment and Order dated 28.09.2012 of the High Court 
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of Delhi at New Delhi iri S. T. Appl. Nos. 51-70 of2012. 
Ajit Kumar Sinha, Sr. Adv., Ms. Niranjana Singh, Vibhushankar 
Mishra, Sudhir Agarwal, D. S. Mahra, Advs. for the Appellant. 
S. Ganesh, Sr. Adv., R. Jawaharlal, Sidharth Bawa, Shyamal, 
Ashwani Kumar, Advs. for the Respondent. 
The Judgment of the Court was delivered by 
SHIVA KIRTI SINGH, J. I. Instant appeals have been preferred 
by Commissioner, Delhi Value Added Tax to assail the judgment and 
order of the High Court of Delhi dated 28.09.2012 in S.T.A.Nos.51-70 
of2012. The High Court reversed the order of the VAT Tribunal and of 
other lower authorities on t
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