LexVOLTAS LTD. versus STATE OF GUJARAT
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A B [2015] 5 S.C.R. 320 VOLTASLTD. v. STATE OF GUJARAT (Civil Appeal No. 2957 of 2007) APRIL 8, 2015 [H. L. DATTU, CJI, ARUN MISHRA AND C AMITAVA ROY, JJ.] Gujarat Sa/es Tax Act, 1969 - s.55A - Notification dated 8. 10. 93 issued under- Entries 2 and 5- Composition rate of tax payable vis-a-vis Work Contract- For fabrication D and installation of air-conditioning plants - Whether falls under Entry 2 and thereby taxable@ 15% or falls under Entry 5 and thereby taxable @ 5% - Held: Assessee's works contract for fabrication and installation of water chilling plant would fall under Entry 5 and would be taxable @ 5% - E Fabrication in terms of the work order in the instant case is distinctly independent, yet integral segment of the works contract contributing to the final physical form of the water chilling plant with the characteristics intended and hence, it cannot be construed to. be, synonymous to the installation F thereof- The legislative intendment of s. 55A is to maintain a direct correlation between the composition rates of tax and the description of the corresponding work contract. Interpretation of Statutes - Interpretation of taxing G statutes - Held: A taxing statute has to be interpreted from the plain and unambiguous expression used therein - There is no room for any intendment- Full effect must be given to every word used in the statute - No construction should be H provided so as to render a part of it otiose or redundant - In 320 VOLTAS LTD. v. STATE OF GUJARAT 321 case of any doubt, the construction beneficial to the subject A is to be adopted. Evidence - Burden of Proof - Qua classification of goods to detennine chargeability- Held: The burden in such cases is on taxing authority. B Words and Phrases: 'Fabrication' and 'Manufacture' - Meaning of, in the context of sales tax. Allowing the appeal, the Court HELD: 1. The competing entries requiring scrutiny c to ascertain the correct composition rate of tax payable vis-a-vis the works contract involved are engrafted in the Notification dated 8.10.1993 issued by the Government 0 of Gujarat in exercise of powers conferred by Section 55A of the Gujarat Sales Tax Act, 1969. A plain perusal thereof would attest that thereby, in the circumstances to be prescribed, a dealer can be left at his option to pay, in lieu of the amount of tax payable, a lump sum by way E of composition, at the rate or rates as may be fixed by the State Government, having regard to the incidence of tax on the nature of the goods involved, in the execution of total value of the works contract. Unmistakably, therefore, the State Government while fixing the F composition rate of tax has to be mindful of the nature of the works contract executed and by no means can be oblivious thereof. Further, a composition rate of tax is in lieu of the amount of levy otherwise payable by the dealer under the Act. The scheme of composition as envisaged G by Section 55A, therefore, does not admit of any synonymity with that of exemption as contemplated in law. This pre-supposition of the High Court, as one of the contributing factors, in concluding that the works H 322 SUPREME COURT REPORTS [2015] 5 S.C.R. A contract in question did fall within the framework of Entry No.2 of the Notification is apparently erroneous. [Para 13] [335-E-H; 336-A-C] 2. The work order in the present case, in clear B terms did enjoin that the design parameters pertaining to tonnage of refrigeration, final temperature of the water to be made available for the process of manufacturing pigments and the quantity of the chilled water essential therefore, were indispensable and were in addition to C the other specifications as offered by the appellant. The rigour of the insistence for the adherence to the design parameters, is patent also from the request of the customer requiring the appellant to provide it with the lay out detail, foundation drawing and other necessary D information essential for the erection of the water chilling plant. The exercise as a whole, as contemplated by the work order, thus was neither intended nor can be reduced to mere installation of the finally emerging E apparatus. The work order, noticeably did not refer to any readymade or instantly available devices, meeting the requirements of the customer, so much so to be only installed at its factory. Instead, the work order had been apparently tailor-made to the requirem
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