The Revenue Department challenged the decision of Rajasthan High Court before the Hon’ble Supreme Court of India of holding that services of loading, unloading, lifting and shifting, by way of the crane provided by the assessee to transport department/other institutions constitute contract of service and not ‘sale’ as provided u/s 2(35)(iv) of the Rajasthan VAT Act, 2003 in the case of Assistant Commercial Taxes Officer, Anti- Evasion-Iii, Ward -I, Rajasthan v. Agarwal Carriers And Lifters [S.B. Sales Tax Revision / Reference No. 132/2020 dated April 13, 2023].
The Rajasthan High Court after applying the test of what is the ‘substance of the contract’ and discerning the true nature of the contract, held that consumer does not have exclusive control and possession of the crane as the conditions in the contract provided for the assessee to undertake the care and maintenance of the cranes during the sustenance of the contract and also supply the services of a driver and helper alongside the crane.
The matter is placed before Division Bench comprising of Justice B.V. Nagarathna and Justice Augustine George Masih.
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