Court Upholds Tribunal: Leasing Ad Boards Not Taxable under Sales Tax Act

The court upheld the Sales Tax Appellate Tribunal's judgment, ruling that the turnover of a dealer in leasing out advertisement boards is not subject to sales tax as the transaction involves immovable property and does not constitute a transfer of the right to use. The court cited precedent and dismissed the revision case filed by the State, emphasizing that if only hire charges are involved without a transfer of right to use, the transaction cannot be taxed under the Andhra Pradesh General Sales Tax Act.

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Issues involved:
The issue involved in this case is the correctness of the judgment in T.A. No. 526 of 1996 on the file of the Sales Tax Appellate Tribunal, A.P., regarding the levy of sales tax on the turnover of a dealer in leasing out advertisement boards.

Judgment Summary:

Levy of Sales Tax on Turnover:
The State filed a revision u/s 22(1) of the Andhra Pradesh General Sales Tax Act challenging the judgment of the Sales Tax Appellate Tribunal regarding the disputed turnover of a dealer in leasing out advertisement boards. The respondent claimed exemption on the ground that the hoardings were immovable property and not liable for tax. The Deputy Commissioner later proposed to revise the assessments for the years 1992-93 and 1993-94, holding that the turnover should be taxed. The Tribunal, after detailed consideration, held that the transaction amounts to immovable property and is not liable for tax. The court, following precedent, dismissed the revision case, stating that if there is no transfer of right to use and only hire charges are involved, the transaction cannot be taxed.

Nature of Transaction and Tax Liability:
The main contention was whether the leasing out of advertisement hoardings would warrant the levy of tax u/s 5E of the Act. The court referred to the judgment in Rashtriya Ispat case [1990] 77 STC 182, which established that the nature of the transaction must be considered, and if there is no transfer of right to use, only hire charges, then it cannot be taxed. The court found no reason to differ with this conclusion and dismissed the revision case without costs.

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