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Issues: (i) Whether the hoardings erected and let out by the assessee constituted goods or immovable property, and whether the rental receipts were exigible to tax under section 6(1)(c) of the Kerala Value Added Tax Act, 2003. (ii) Whether the transaction amounted to a transfer of the right to use the hoardings, and whether liability to service tax excluded liability to value added tax.
Issue (i): Whether the hoardings erected and let out by the assessee constituted goods or immovable property, and whether the rental receipts were exigible to tax under section 6(1)(c) of the Kerala Value Added Tax Act, 2003.
Analysis: The hoardings were fixed to concrete structures using nuts and bolts and were capable of easy removal. The reasoning applied the distinction between permanent attachment to earth and a detachable fixture, and held that the structure was not comparable to heavy machinery erected as part of an immovable installation. The statutory definition of goods under the Kerala Value Added Tax Act was wide enough to include such movable articles, and the nature of the hoarding answered that description.
Conclusion: The hoardings were treated as goods and the receipts were held liable to tax under section 6(1)(c) of the Kerala Value Added Tax Act, 2003.
Issue (ii): Whether the transaction amounted to a transfer of the right to use the hoardings, and whether liability to service tax excluded liability to value added tax.
Analysis: The agreement showed that the lessee had exclusive use and control of the hoardings during the contract period for displaying advertisements according to its own requirements. The attributes of a transfer of the right to use goods were satisfied because the goods were available for delivery, the identity of the goods was clear, the transferee had the legal right to use them, the transferor stood excluded during the period of transfer, and the same rights were not available to be re-transferred simultaneously. The judgment also applied the principle that service tax and value added tax operate in different fields and payment of service tax does not, by itself, negate liability under the value added tax law.
Conclusion: The transaction was held to be a transfer of the right to use goods, and the plea that service tax liability barred value added tax liability was rejected.
Final Conclusion: No interference was called for with the concurrent findings of the authorities below, and the revision failed on all substantial issues raised.
Ratio Decidendi: A hoarding capable of easy removal and transferred for exclusive use under an agreement is goods within the sales tax regime, and where the transferee has exclusive control for the period of hire, the transaction constitutes a transfer of the right to use goods notwithstanding parallel service tax liability.
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