TaxTMI 
TaxTMI 
2015 (4) TMI 210
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....relating to the deferred sale consideration received after 1.4.2005 in respect of the transfer of right to use KST suffered goods leased out prior to 1.4.2005. 2. The assessee is a Company incorporated under the Companies Act, 1956. It was a dealer under the Karnataka Sales Tax Act, 1957 (hereinafter for short referred to as 'the KST Act') up to 31.3.2005. From 1.4.2005 the assessee is a registered dealer under the provisions of the Karnataka Value Added Tax Act, 2003 (hereinafter for short referred to as 'the KVAT Act'). The assessee is engaged in the lease of cars to corporate bodies and to other customers in the State of Karnataka. All the cars which were leased out by the assessee till 31.3.2005 were purchased by it from deal....
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....of the lease agreements and each such renewal constituted a deemed sale involving the transfer of right to use goods. On such basis, the assessee was made liable to pay tax under the KVAT Act on such lease rentals received from April 2005 and onwards up till September 2008 which relate to the KST suffered cars given on lease prior to 1.4.2005. 3. Aggrieved by the said order, the assessee preferred an appeal to the Joint Commissioner of Commercial Taxes (Appeals)-1 who upheld the order of the Prescribed Authority and dismissed the appeals. 4. Aggrieved by the said order, the assessee preferred a second appeal to the Karnataka Appellate Tribunal. The Karnataka Appellate Tribunal after referring to the provisions of the KST Act as well a....
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..... There are no words in the KVAT Act to the effect that the vested rights of any assessee which accrued to him under the KST Act shall be impaired. The assessee herein had the vested right under the proviso to Section 5-C of the KST Act not to be fastened with any levy of tax under that Section on the transfer of right to use goods which had already suffered single point sales tax under Section 5 of the said Act. This immunity of the assessee cannot be affected or impaired by the enactment of the KVAT Act, which is expressly enacted with prospective effect from 1.4.2005. There is no provision therein authorizing the levy of tax under the KVAT Act on the deferred receipts of consideration of sale which occurred prior to 1.4.2005 when the sai....
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.... rentals is payable every month, the amounts received after the KVAT Act coming into force cannot become the part of the sale consideration for the period subsequent to KVAT coming into force and, therefore, he submits the Tribunal was justified in passing the impugned order. 7. The question of law that arise for our consideration in these Revisions is, Whether the Tribunal was justified in giving a finding that the lease rentals received after 1.4.2005 in respect of transfer of right to use KST suffered cars leased out prior to 1.4.2005 is not exigible to tax under the KVAT Act? 8. The facts are not in dispute. The assessee under a lease agreement leased to its customers KST s....