Build Own Operate Transfer contract is a works contract

Build Own Operate Transfer contract is a works contract:
The Andhra Pradesh High Court has held that a contract for imparting computer education in schools including leasing of computer hardware, software and connected accessories on Build Own Operate Transfer (BOOT) basis is a works contract. The question before the court was whether the contract was purely a service contract or a works contract.The petitioner here contended that although the petitioner provided computers and software for teaching purposes, the same was purely incidental to the service contract and that the computers and software installed remained the property of the petitioner till the ownership is transferred at the end of 5 years. The court however relying upon the Supreme Court judgment in the case of Larsen & Toubro Ltd. [2013-VIL-03-SC-LB] held that the contract in question involves both a contract of service and a contract of sale of goods.It was held that that contract is a composite contract and according to legal fiction provided under Article 366(29-A)(b) of the Constitution of India, it is permissible to separate the transfer of property in goods from the contract of service. The court hence held the contract in question to be works contract observing further that mere fact that the ownership of the computers and the accessories was passed on to goverend of the contract does not alter the naturthe contract. [ NIIT Ltd. – 2014-VIL-109-AP]