THE ADDL COMMISSIONER OF SALES TAX, VAT-III, MUMBAI
Vs M/s KIRLOSKAR COPELAND LTD
Sales Tax/VAT – accepting defective compressors outside the warranty period with certain fixed repair charges and replacing them at the option of the customer with any other repaired compressor does not tantamount to sale so as to attract Sales tax: High Court [para 10, 11, 12, 14, 16]
High Court observations –
++ In order to constitute a sale, it is necessary that; (i) there has to be a transfer of title to the goods which is supported by monetary consideration; and (ii) the words ‘valuable consideration’ take colour from the preceding expression ‘cash or deferred payment’ which would mean some other monetary payment in the nature of cash or deferred payment.
++ In the present case, we find that there is no sale at all.
++ compressor and therefore, there was no consensual agreement of sale supported by price or other monetary consideration. We are in full agreement with the findings of the MSTT on this aspect. What is paid is only the repair charges and not the price for purchasing the repaired compressor. This is clear from the fact that even if the customer opted not to take a repaired compressor off the shelf of the Respondent, it would still have to pay the same repair charges for repairing its own compressor and wait for 60 days to receive the same from the Respondent, after repairs. This puts it beyond the realm of doubt that what is charged to the customer by the Respondent is only repair charges and not a price for the sale of the repaired compressor.
Application dismissed