TaxTMI 
TaxTMI 
1988 (3) TMI 422
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....of goods on hire-purchase or any system of payment by instalments; (d) a tax on the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration; (e) a tax on the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration; (f) a tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made;". The above clause came into force on 2nd February, 1983. The Seventh Schedule to the Constitution consists of Lists I, II and III setting out the subject-matter of laws which the Parliament and the Legislature of the States have the power to....
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.... Rs. 1,00,000." We may, for the sake of convenient reference, sum-up the legislative changes: ----------------------------------------------------------------------------- S. No. Particulars Date of coming in to force ----------------------------------------------------------------------------- 1. Clause (29-A) of article 366. 2-2-83 2. Explanation IV to section 2(n) through Act 18 of 1985. 2-2-83 3. Clause (iii-b) inserted by Act 18 of 1985 in section 2(e) defining the expression "dealer". 13-9-85 4. Section 5-E levying tax on the amount realised in respect of right to use goods inserted by Act 18 of 1985. 1-7-85 ----------------------------------------------------------------------------- 3.. In view of the power conferred on the State Governments to levy tax on the transfer of the right to use any goods for any purpose and following the amendments made to the Andhra Pradesh General Sales Tax Act referred to above, the sales tax authorities felt that banks which provide safety-lockers for the use of customers are liable to pay tax on the charges realised. In that view, notices were issued to various banks by the Commissioner of Commercial Taxes to show cau....
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....as the Notification G.O. Ms. No. 1091, Revenue, dated 10th June, 1957 issued under section 9(1) of the Act was in force. We have already referred to the aforesaid notification in para 4 supra under which exemption was granted from all taxes payable to the banks in the State of Andhra Pradesh. This notification continued to be in force till it was rescinded by G.O. Ms. No. 794 dated 19th August, 1987. We find considerable force in the contention of the learned counsel for the petitioners that in any case, no tax can be levied till the date of publication of G.O. Ms. No. 794 dated 19th August, 1987 rescinding the earlier notification dated 10th June, 1957. The notices issued by the department to the bankers proceeded to state that tax is leviable from the year 1983-84, obviously for the reason that the Forty-sixth Amendment to the Constitution inserting clause (29-A) in article 366 of the Constitution of India, came into force on 2nd February, 1983. We must, however, point out that the insertion of clause (29-A) in article 366 of the Constitution did not automatically confer power on the State Government to levy tax. Consequential steps have to be taken by effecting necessary amendme....
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....e above position did not seriously contend before this Court that the provisions in the Act relied upon conferred power upon the authorities to levy tax prior to the date of publication of G.O. Ms. No. 794 dated 19th August, 1987. We accordingly declare the law and quash the impugned notices in all the cases. 7.. Learned counsel for all the petitioners made a request that the larger issue whether the petitioners-banks are liable to pay tax at all may be considered as extensive arguments were advanced and the sales tax authorities are bound to initiate action once again for levy of tax subsequent to the period of publication of G.O. Ms. No. 794. It is pointed out that the question would have to be reagitated once again by filing writ petitions and if the larger issue is settled one way or the others multiplicity of proceedings will be avoided. Having heard the arguments in some detail we feel that it is desirable to decide the larger issue concerning the liability of the banks to pay sales tax on the charges realised by the banks for hiring safe deposit lockers. 8.. The main thrust of the argument of Sri Ananta Babu who led the arguments is that the impugned provision does not....
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.... thereof and access thereto during the period of this agreement and in accordance therewith. The hirer shall not assign or sublet the locker or any part of it, nor permit to be used to any purpose other than for the deposit of documents, jewellery or other valuables nor shall the hirer use the locker for the deposit of any property of an explosive or destructive nature." There are provisions relating to the payment of the hire and the bank's lien on all the moneys to sell the property by the safe deposit department of the bank if the rental is not paid. The agreement can be terminated by giving seven days' time by either side. If no such termination is made, the bank will consider the renewal in favour of the hirer for a further period. Clause 9 of the agreement provides that all repairs required to be done to the locker or keys shall be done exclusively by workmen appointed by the bank. Clause 11 provides that for reasons of grave or urgent necessity the bank reserves the right of closing the safe deposit department for such period as it may consider necessary. The bank also reserves the right of making changes in the working hours. Clause 12 cautions the hirers to keep the key....
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....arth in the strong rooms of the banks. It is submitted that safe deposit lockers are permanently fixed in the strong rooms and they do not answer the description of moveable property. According to the General Clauses Act, immoveable property shall include land, benefits arising out of the land, and things attached to the earth. The Transfer of Property Act defines the phrase "attached to earth", but gives no definition of immoveable property beyond excluding standing timber, growing crops. The phrase "attached to the earth" is defined in the Transfer of Property Act as imbedded in the earth, as in the case of walls or buildings or attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached. The definition of immoveable property in the General Clauses Act is held to apply even to the Transfer of Property Act. It is all the more applicable to the Sales Tax Act which levies tax on transactions relating to goods constituting moveable property. There is considerable force in the contention of the learned counsel for the petitioners that lockers imbedded in the earth cannot be regarded as moveable property and cannot, therefore, answer the de....
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....the facility of a locker at their residence? It is common knowledge that every steel almirah is fitted with a safe deposit locker of high thickness and gauge. The class of customers who go to banks for depositing their valuables in lockers do certainly have steel almirahs in their houses or even otherwise can afford to purchase one such almirah with safe deposit locker. But then why do these persons prefer to go to a bank and deposit their valuables in the lockers located there without keeping the articles in their houses under constant watch by them? The answer is obvious. It is because the safe deposit lockers hired by banks are located in impregnable strong rooms and prowlers cannot gain access into these strong rooms of the banks. The wide feeling is that valuables deposited in bank lockers are safer than at home because of the high security arrangements at the bank and the provision of strong rooms. It cannot, therefore, be gainsaid that persons pay the hire charges for the lockers not only for the right to use the lockers but also for a host of other services referred to above closely associated with the maintenance of lockers by the banks. In that sense the hire charges coll....
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....delivery of lockers is involved when a bank hires a safe deposit locker to a constituent. The bank keeps the custody of the locker and the constituent is merely a licensee having access to go into the strong room and operate the locker. Learned counsel also pointed out that the hirer does not even have the facility to open the locker on his own, because the locker cannot be opened unless the master key available with the bank is also simultaneously operated. Learned counsel, therefore, submitted that the bank does nothing having the effect of putting the lockers in the possession of the bailee. On the other hand, the conditions in the contract unmistakably indicate that the exclusive possession and custody of the locker are kept with the bank itself always and not even liberty is given to the hirer to open the locker whenever he likes. The lockers can be operated only during the prescribed hours and a hirer cannot operate the locker with his own key, unless the master key remaining with the banks is also simultaneously used. On these facts, the learned counsel contended that there is neither delivery of the lockers nor has anything been done by the bank having the effect of putting....