Kone Elevator India Private Limited v. State Of Tamil Nadu

Kone Elevator India Private Limited v. State Of Tamil Nadu

(Supreme Court Of India)

Writ Petition (Civil) No. 232 of 2005 with SLPs (C) Nos. 14148-53 of 2005, etc | 13-02-2008

1. The question raised for consideration in these petitions is whether manufacture, supply and installation of lifts is to be treated as "sale" or "works contract". As the writ petitions filed by the petitioners have raised important questions of law, the matters have been directed to be placed before a three-Judge Bench.

2. Heard Mr Harish N. Salve, learned Senior Counsel for the petitioner and Mr Anoop Chaudhari, learned Senior Counsel for the State of Andhra Pradesh and the learned counsel for the States of Gujarat, Uttar Pradesh and Tamil Nadu.

3. In State of A.P. v. Kone Elevators (India) Ltd., (2005) 3 SCC 389 [LQ/SC/2005/205] , it was held that such a contract constituted a "sale" and does not amount to "works contract" and the element of service provided by the vendor of the elevator was negligible. The learned Senior Counsel Mr Chaudhari submitted that having regard to the nature of the contracts, the said view was not correct. Our attention was drawn to a series of decisions rendered by this Court in State of Rajasthan v. Man Industrial Corpn. Ltd., (1969) 1 SCC 567 [LQ/SC/1969/38] : (1969) 24 STC 349 [LQ/SC/1969/38] , State of Rajasthan v. Nenu Ram, (1970) 26 STC 268 (SC) and Vanguard Rolling Shutters & Steel Works v. CST, (1977) 2 SCC 250 [LQ/SC/1977/121] : (1977) 39 STC 372 [LQ/SC/1977/121] , which take a contrary view. The said decisions have not been noticed in Kone Elevators (India) Ltd.

4. The learned counsel appearing for the States of Gujarat, Uttar Pradesh, Andhra Pradesh and Tamil Nadu submitted that the decision in Kone Elevators (India) Ltd.1 was correctly decided and placed reliance on Hindustan Shipyard Ltd. v. State of A.P., (2000) 6 SCC 579 [LQ/SC/2000/1045] . They also submitted that the petitions under Article 32 are not maintainable. The respondents would be at liberty to raise these contentions also when the matters are finally heard.

5. Having regard to the issues involved in these matters and apparent conflict in the view expressed by three-Judge Benches of this Court, we refer these matters to a Constitution Bench. The Registry will take further steps to post before the Constitution Bench.

Advocate List
Bench
  • HON'BLE JUSTICE K.G. BALAKRISHNAN
  • C.J
  • HON'BLE JUSTICE R.V. RAVEENDRAN
  • HON'BLE JUSTICE J.M. PANCHAL
Eq Citations
  • (2008) 15 VST 457
  • (2010) 14 SCC 788
  • LQ/SC/2008/331
Head Note

Constitution of India — Art. 136 — Questions of law — Conflicting decisions of three-Judge Benches — Whether manufacture, supply and installation of lifts is to be treated as "sale" or "works contract" — As writ petitions filed by petitioners have raised important questions of law, matters directed to be placed before a three-Judge Bench — Having regard to issues involved and apparent conflict in view expressed by three-Judge Benches, matters referred to a Constitution Bench — Registry to take further steps to post before Constitution Bench — Sales Tax — Nature of contract — Manufacture, supply and installation of lifts — Whether to be treated as "sale" or "works contract"