TaxTMI 
TaxTMI 
2011 (2) TMI 1255
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....structures on which advertisements are displayed. It is the petitioner's case that the advertisements originally used to be a painting on a metal sheet; at present it is done by printing on a vinyl sheet; the vinyl sheet is fixed to the steel structure ; they pay licence fee for use of the space, and for erection of the steel structures, to the owners or Other occupants of the building upon which the structure is erected ; various persons including the Government of Andhra Pradesh, who intend displaying their hoardings at specified points, negotiate and enter into contracts with the petitioner for display of the hoardings ; the rates are agreed upon based upon the location, size and duration, and a period hoarding fee is paid by the advertiser to the petitioner ; in so far as the Government of Andhra Pradesh is concerned, the Special Commissioner, Information and Public Relations Department, issues letters to the petitioner, in the form of orders, specifying the location and size of the hoarding, the rate per square feet and the total hoarding fee for a period of one month; the terms and conditions require the petitioner to ensure good quality error free vinyl display, to take ....
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.... the ambit of advertising services, and would not amount to a transfer of the right to use goods. According to the learned senior counsel the art work, on the vinyl sheets, is mostly provided by the customers, although in a few cases the art work is done by the petitioner ; services of third parties are utilized for the purpose of getting the vinyl made for the customers at their specific request; the hoarding is not a movable property, and is a permanent steel structure which is erected with proper foundation; there is a civil structure at the footing either on the ground or on the top of the building where the hoarding is erected ; once it is so attached, except by the process of destroying the hoarding itself and removing the signage material, it cannot be shifted from one place to another ; the location of the hoarding is fixed ; if it has to be moved from one place to another it has to be completely dismantled ; the hoarding is also specifically designed for a particular space depending on the height at which it is erected, the vision clearance that is available, etc.; the hoarding is, therefore, not a moveable property; all that the customer is entitled is to have the vinyl d....
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....he other hand, Sri A. V. Krishna Kaundinya, learned Standing Counsel for Commercial Taxes, would submit that the petitioner is a lessee of the land on which it has constructed its own hoardings which are required to be removed after expiry of the lease ; the hoarding is "moveable property" ; the transaction between the petitioner and the owner of the land, and the transaction with his customers now sought to be taxed, are different and distinct transactions ; advertisement boards, signage boards, hoardings, etc., let out by the petitioner are "goods", and not "immovable property", and hence are liable to tax under section 4(8) of the Act ; if something is annexed to a building or ground owned by another, the object of such annexation would be to enhance the value of the immovable property for its beneficial use ; if, however, they are annexed to a third party's property, and have to be removed after the lease ends, then such goods so annexed would become moveable property ; in the present case the agreement entered into by the petitioner with the land or building owners also shows that the structures and other accessories to be erected by the petitioner would be the property of....
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....movable property"; the "hoarding" is a frame or structure placed either on the unipole or the steel structure ; the vinyl sheet, which is stuck to the hoarding, constitutes the display item ; during the display period, other products of the advertising agency or other advertising agencies are not permitted use of the unipole or the steel structure ; a licence is granted exclusively to one person for the period of contract ; and this constitutes "transfer of the right to use goods" attracting section 4(8) of the Act. In support of his submission that the hoarding space on the unipoles and steel structures, or for that matter the unipoles and the steel structures themselves, are not "immovable property", but constitute "goods", learned standing counsel would rely on Commissioner of Central Excise v. Solid and Correct Engineering Works [2010] 2 GSTR 481 (SC) ; [2010] 5 SCC 122. Under article 246(3) of the Constitution of India, read with entry 54 of List II of the Seventh Schedule thereto, the State Legislature has the power to make a law relating to the tax on the sale or purchase of goods. Article 366(12) of the Constitution of India defines "goods" to include all materials,....
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....TC 91 (SC) ; [2006] 3 SCC 1). Section 2(34)(d) of the Act defines "tax" to mean a tax on the sale or purchase of goods payable under the Act, and to include 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. Section 4 of the Act relates to charge to tax and, under sub-section (8) thereof, every value added tax dealer who transfers the right to use goods taxable under the Act for any purpose, whatsoever, whether or not for a specified period, to any lessee or licensee for cash, deferred payment or other valuable consideration, in the course of business shall, on the total amount realised or realisable by him by way of payment in cash or otherwise on such transfer of the right to use such goods from the lessee or licensee, pay a tax on such goods at the rates specified in the Schedules. Tax, under section 4(8) of the Act, is to be charged on the transfer of the right to use "goods" taxable under the Act. Transfer of the right to use "immovable property" would not fall within the ambit of section 4(8) of the Act inasmuch as "immovable property" would not constitut....
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....xed that it cannot be removed 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 mode of annexation and the object of annexation are applicable as relevant tests. The test is whether the annexation is with the object of permanent beneficial enjoyment of the land or building. Attachment, in order to qualify for the expression "attached to the earth", must be for the beneficial attachment of that to which it is attached. (Solid and Correct Engineering Works [2010] 2 GSTR 481 (SC) ; [2010] 5 SCC 122, Wake v. Hall [1983] 8 Add Cas 195 (HL)). Where a plant has to be assembled, erected and attached to the earth by a foundation it is not capable of being sold as it is, without anything more, and does not constitute "goods". (Quality Steel Tubes (P) Ltd. v. Collector of Central Excise, U. P. [1995] 2 SCC 372 [DB] and Mittal Engineering Works (P) Ltd. v. Collector of Central Excise, Meerut [1977] 106 STC 201 (SC) ; [1997] 1 SCC 203). It is, however, not necessary that whatever is embedded in the earth must be treated as immovable property. For example, a factory owner or a house-holder may purch....
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....sp; In the order of assessment dated September 25, 2009, the third respondent observed that it was difficult to state with precision as to what constituted an annexation ; it was a question which depended on the circumstances of each case and mainly on two circumstances as indicating the intention, i.e., the degree of annexation and the object of annexation ; the degree of annexation can be such that the hoardings or structures can be attachable or detachable ; the hoardings and signage boards are attached to the steel structures and unipoles ; in order to use the hoardings, and the signage boards, it has to be attached to the steel structure and unipoles ; such attachment lasts only as long as the hoardings and signage boards are used and, when not used, it can be detached and shifted to some other place ; such attachment does not make the hoardings, and signage boards, part of the permanent structure ; hence it is movable property ; if the object of annexation is to let out advertisement boards, signage boards and hoardings, etc., to different persons, companies and departments for display of advertisements of their products, it should be construed that the annexation is made fo....
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....es/steel structures embedded to the earth. While the burden is, undoubtedly, on the petitioner-assessee to establish the nature of the transaction, and such initial onus cannot be placed on the Revenue, the fact remains that the aforesaid jurisdictional facts are required to be determined, on an examination of all relevant factors, for the assessing authority to exercise jurisdiction under section 4(8) of the Act. It is only if the vinyl sheets/hoardings/unipoles/steel structures constitute "goods" under section 2(16) of the Act would the transfer of the right to use them be exigible to tax under section 4(8) of the Act, provided all other necessary conditions are satisfied. The fact or facts upon which the jurisdiction of a court, a Tribunal or an authority, depends can be said to be a "jurisdictional fact". If the "jurisdictional fact" exists, a court, Tribunal or authority has jurisdiction to decide other issues. If such fact does not exist, a court, Tribunal or authority cannot act. A court or a Tribunal cannot wrongly assume the existence of a jurisdictional fact, and proceed to decide a matter. The underlying principle is that, by erroneously assuming existenc....