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of The High Court considered the levy of VAT on a franchise of a trademark, analyzing whether the transfer of the right to use goods constituted a deemed sale. Citing a Kerala High Court case, it was held that transferring a trademark to franchisees for use, with royalty as consideration, does not amount to a 'deemed sale.' The court emphasized the complexity of taxing franchise agreements and sales of goods, highlighting the unique aspects of franchise transactions, such as intangible assets and intellectual property. In this case, the franchise agreement granted a non-exclusive license, not a transfer of the right to use goods, thus not attracting VAT under the UPVAT Act. The court noted that if royalty payments were already subjected to service tax, they cannot be taxed again as a sale of goods to prevent double taxation. Upholding the Commercial Tax Tribunal's view, the revision application was dismissed.
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