Central Sales Tax Act, 1956 – Works Contract - Whether the supply of the goods from Mumbai to Delhi to execute the works contract constitute inter-state sales - Tribunal view that the goods were appropriated to the contract, which was concluded in Mumbai, upon acceptance of the orders – Revenue view that sale of the right to use the elevators was concluded in Delhi, which was also the place of performance of the contract
HELD - the appreciation of the law by the Tribunal in this case is sound and unexceptionable. The placement of an order by the agent for procurement of the lifts in this case was merely an offer. It is only upon its acceptance and further steps taken by the supplier that an offer crystallizes into a binding promise or contract. That took place in Mumbai. It is now too far well settled that the incidence of Central Sales Tax or even sale of goods, occurs where the goods are appropriated to the contract.
In this case, the specifications and the invoices issued in pursuance to the contract are sufficient to hold that the goods that moved from outside Delhi for execution of the works contract are inter-state sale and as such cannot be taxed under the Delhi Sales Tax – the Tribunal order is upheld and Revenue appeal is dismissed