Page 247 - GSTL_21st May 2020_Vol 36_Part 3

2020 ] IN RE : SIEMENS LTD. 493
(252) E.L.T. 481 (S.C.)], M/s. Sri Velayuthaswamy Spinning Mills v. The Inspector
General of Registration and the Sub-Registrar [(2013 (2) CTC 551)], M/s. Perumal
Naicker v. T. Ramaswami Kone and Anr. (AIR 1969 Mad 346). After going through
same, we find that the following principles emerge :-
If a machine is attached for operational efficiency, it does not become
immoveable property. The degree and nature of annexation is an important ele-
ment for consideration; for where a chattel is so annexed that it cannot be re-
moved without great damage to the land, it affords a strong ground for thinking
that it was intended to be annexed in perpetuity to the land. The English law at-
taches greater importance to the object of annexation which is determined by the
circumstances of each case. One of the important considerations is founded on
the interest in the land wherein the person who causes the annexation possesses
articles that may be removed without structural damage and even articles merely
resting on their own weight are fixtures only if they are attached with the inten-
tion of permanently improving the premises. The Indian law has developed on
similar lines and the mode of annexation and object of annexation have been ap-
plied as relevant test in this country also.
If the fixing of the plants to a foundation is meant only to give stability to
the plant and keep its operation vibration free then it cannot be called as ‘Im-
moveable property’..
If the setting up of the plant itself is not intended to be permanent at a
given place and if the plant can be moved and is indeed moved after the road
construction or repair project for which it is set up is completed, then also it can-
not be termed as ‘Immoveable property’.
52. So, what to be seen above is that in deciding whether a property is
movable property or otherwise, we have to see what is the mode of necessary
annexation and the object of annexation. If object is so annexed that it cannot be
removed without causing damage to the land then it gives a reasonable ground
for holding that it was intended to be annexed in perpetuity. Also whether the
intention of the parties while erecting the system was that the plant has to be
moved from place to place in the near future would also make a difference. We
have to see by relying upon the above principles i.e. (1) mode of object of annexa-
tion (2) mode of annexation whether the plant was installed merely to make it
wobble free or it is affixed to the earth. Also, it needs to be seen whether ‘the set-
ting up of the plant itself is not intended to be permanent at a given place. The
plant can be moved and is indeed moved after the project for which it is set up is
completed.”
53. Now, that we have discussed the above judgments, we shall see
whether the present issue i.e. composite supply of a goods and services would be
termed as immovable property or not. In order to answer this question, we have
to go through the nature of a contract as well as documents submitted by the ap-
pellant in relation to execution of the project.
It is seen from the nature of contract which envisages installation, which
involves civil works to erect the structure for execution of the project in its entire-
ty. It is an entire system comprising of a variety of different structures which are
installed after a lot of prior work which involves detailed designing, ground
work. Appellant has also submitted few photographs of the project which clearly

GST LAW TIMES  21st May 2020  247