The High Court · 2025

:SRl SWAROOP OOR|LLA,(SPL SC FOR CT) REPRESENTED BY SRI T.CHAITANYA KIRAN ADDITIONAL GOVERNMENT PLEADER counsel for the Respondents : sRr s.R.R. vrswANATH, REPRESENTED By MS.S.N.SRIDEVI The Court made the following : JUDGMENT THE HONO URABLE SRI JUSTI CE P.SA M KOSHY AND THE HONO URABLE SRI JUSTICE NARSING RAO NAN t) IKONDA TAX REVISION CASE No.6 4 of2009 ORDER: Qtr the tton hte srt Jultrcr P Sun Kash)") The instant is a I ax Revision case fiied by the petitkrner ' Statc under Section 22(l) read with Rute 40 of the APGST Rules under the APGS'f Act assailing the order passed by the Sales Tax Appellate Tribunal' Andhra P|adesh' Hyderabad (tbr short, the 'STAT') in Tribunal Appeal No 48 ol 1008' deciclcd on 19.09.2008

2. Heard Mr T.Chaitanya Kiran, leamed Additionat Govcrntlcnt Pleader representing Mr. Sr'r'aroop Oorilla' learned Speciai Standing Counsel lor Conrrnercial Tax fbr the petitioner - State' and Ms S N Slcedevi' leamed counsel representing Mr' S'R'R' Viswanath' leamerl counsel tbr the respor-rdent'

3. Vide rhe impugned order, the STAT had allow'ed the appeal pret'ened b1" the respondent herein and has accepted the contention of the lespondcnt that the natttreofworkexecutedbytherespondentinsofaraslayingofmarblesand flooring is concemed, it amounts to "works contract" and would not lirll u'ithin tltc Irut r ierr ol"'contt act ol sale"' ,/ Page 2 of ,1

4. It is this decision of the STAT which has been assailed by the petitioner - State in the instant Tax Revision Case.

5. Assailing the irnpugned order, the learned Additional Government Pleader heavily relied upon a decision of the Hon'ble Suprerne Cout in the case of Kone Elevator India Limited vs. State of A.P.r.

6. Learned counsel for the respondent brought to the notice of this Court a larger Bench judgment of the Hon'ble Supreme Courl in the case of M/s. Kone Elevator India Pvt. Ltd. vs. State of T.N. & C)rs.2 rvherein the three Judge Bench decision of the Hon'ble Supreme Court has been overuled by the larger Bench in the aforesaid case and hetd in paragraph No.64 of its judgment as under: "61. .........There has to be a safety device. ln certain Stotas, it is controlled by the legislatite enaclmenl and lhc rulcs. ln ctrlain Sktes. it ts rutt. but the.fatt remains that a lift is installed on certain norms and paramelers kceping in view numerous .foctors. The installation require.s tonsideroble .skill and experience. The labour and service element is obviotr.s. What hu.r becn loken notc of in Kone Elevators (supra) is that lhe compan) had brochurcs.for various lypes oJ lifts and one is requiretl to. place order, regard being hud to the building, and also make certoin preparatory work. Bul il is nol in dispute thot the prepdralory work has lo be done laking into consiclcrtrtion os lo hott' lhe lift is going to ba uttoched to the building. The natura (t lha contracts clearly exposit that thelt are conlrocls .for supply and instalhtbn o/'lhe lifi whcre ktbour and ' t4o src p.z2 '1zota; z scc r ( i reryice clemenl i'; invoh'ecl lruli'idually manuJactured goods such us lifi car' t?tol()rs, rol)es rttils etc ctrc lhe contponenls of the tifi v'hich ure evet ttully itlslttlletlttllhc.silafitthatifttooperateinthebuildinglnctlnslitLttittnti ternt.\. it is trtuts.f cr e ither in gtotls or some other .form ln.f'uct. uftar thc gttoLl u.e u:settthleLl antl inslalled v'ith skill ancl labom' al lh( \ilc' it heutnrs tt pcrnunent .firturt: o.f the building' lnvolvemenl of the skill hus been clubortrtL:lt clettlr y ith h.1' ttt' High Cot.trl tt-/ Bombay in Otis Eletator (sLrpra) untl tht factual ltttsition is untlispulahle arul itespective of u'hather inslollution i's regtrltttetl b.y's'tatutory law or not, the result would be the sama' ll'a nrul hasttn Io utltl that this posilion is slated in respecl of a composite controct .ulti(:h rctltrires thc contrdclor lo instoll a liJi in a building' ll is nacc\sary lo :tdl( hare rhat if.there are filto controcts, namely, purchase of'lhe cotnltonents o/'tht ti/i fr otn a tlcaler. it would be o conlracl for sale and similarly if se Ttutt c()ntruct is cntercd into for installulion, lhal would be a cttnlrutl .fbr lubour atul scrvice But, n pregnani one, once there is a co1xPOSite contract.fitt suppl.v atul itts ttrlltttio n, it has b be lrcated as a works contract, Jbr it is rtttl tt :aia o/ utxtis,dttttlcl sin4tlicitar. lt is not chattel soldas chatlaL or' /or thut m'tlttt' tt t:lttttltl hcing Lilache(l lo another chatteL There'fore' it ttould rnt hc upprol)rialc to lcrm il as a contracl .[or sale on lhe htdntck thut th( (-.ontpontt'tls arc hroughL k) the site, i'e, building' and prcpurtd '1itr dtlitr.r" lht trtnt.lu:iott. Lu has heen reached in Kone Elevalors (supru), is buscd on lhe hedrock ol int:itlental sert'ice for leliverl' lt ttoukl nol be legdlt'' (orr(:cl ltt ntukt .sttch tt Llittinction in respect of LtJi, for the conlrctct itsalI prolitundly .slttctks ol ohliguiion to suppl)) goods ttnd materials as t'ell as in'slullulirtn rl thc tili trhith thtittusll' conveys perJbrmance of labour and serrit:e' Hentz tht fitrulttnrcnlul t:httracteristics ctf works contract ure salisf ed T'hut ttnult'scd' va contltule and httltl thut the decision rendered in Kone Elevotor'\ (suptu) Lk)(s not Lorrctll.v'la; dottlt the lcu' and it is, accordingly' overruled ' \ (

7. ln vicr.v of the fact that the larger Bench of the IIon',bte suprcmc Court has already laid to rest the said issue and thereby overruled the ear'lier dccisi6n t Page 4 of4 rendered in the case of M/s, Kone Elcvator India pvt. Ltrl. vs. state of r.N. & ors. (three Judge Bench decision of the Hon'ble Supreme court) and the STAT also relying upon a decision of the Unifled High court of A.lr. in rhe case ol'M/s. United Mosaics vs. The state of Andhra pradeshr while reaching to the said conclusion, which again still holds good and has not been challenged betbre any forum, we do not find any substance in the instant case tiled by the petitioner State and the Tax.Revision Case accordingly stands re.iected.

8. As a sequel, rniscellaneous petitions pending ifany, shall stand closed SD/- K. SRINIVASA RAO JOINT REGISTRAR //TRUE COPYII To, ECTION OFFICER I '1. The Sales Tax Appellate Tribunal, Hyderabad 2. One CC to SRI SWAROOP OORILLA(SPL SC FOR CT) tOPUcl 3. One CC to SRI S.R.R. VISWANATH, Advocate [OPUCI 4. Two CD Copies PCSD/gh t 53 stc rza ) HIGH COURT DATED:0210712025 JUDGMENT TREVC.No.64 of 2009 --':=-:::=\ ,r'.. iai S ta,.i'...\ \r, ,:.'.r -. Y, \ \ t'. \, . 21 [lJB 2E *r' c ,)^ i_ar L1 REJECTING THE TAX REVISION CASE 6