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2008 (1) TMI 2
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....es for advertisement services. It creates original concept and design advertising material for their clients and design brochures, annual reports etc. The Contract between the appellant and their clients does not appear to have been entered into in writing as no written contract as such has been placed before us. 4. We may notice a purchase order and the invoice which have been produced before us and the authenticity whereof is not in question : ESTIMATE P & PR Unit M/S ISRO HEADQUARTERS, Antariksh Bhavan, New BEL Road, Bangalore, Estimate No. 014F Date : 26.04.2003, Job No.: 051/APR/ 03, Enquiry No. Co-ordinated by : Mr. C.S. Ramachandran Particulars Qty. Rate Rs. P. Amount Rs. P. 1 GSAT 2 POSTER Conceptualising, Design and Production of Computer Artwork of size A3, front back 1 No. 1 No. 1,500.00 1,500.00 1,500.00 1,500.00 2 B/w Line drawings in back page Artwork of size A5 4 Nos. 100.00 400.00 3 Digital Inkjet Output on Photoglossy Paper for Layout of size A3 (1.5 sq. ft.)@ Rs. 100/- per. sq. ft. ....
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....of the above discussions, I hereby complete the assessment for the year 2003-2004 under section 12(3) of the KST Act 1957 by confirming the turnovers proposed in the proposition notice. Gross turnover Rs. 1,97,72,296-00 Add. Towards omissions as per. Int. report Rs. 6,07,840-00 Gross turnover determined Rs. 2,03,80,136-00 Less : Exempted turnover 1) Taxes collected Rs. 2,43,848-00 2) Discount allowed Rs. 80,332-00 3) Service charges, design & art work charges collected in which no transfer of property in goods is involved Rs. 54,27,260-00 4) Advertisment charges for Newspapers collected Rs. 80,12,976-00 5) Sales outside the state Rs. 62,400-00 Rs. 1,38,26,816-00 Taxable turnover Rs. 65,53,320-00 Classification of TTO: 1) Sale of Computer Printedmaterials @ 8% from 1.4.03 to 31.5.03 Rs. 4,57,242-00 Rs. 36,580-00 2) -do- from 1.6.03 to 31.3.04@ 9% Rs. 16,19,122-00 Rs. 145,721-00 3) -do- to Government Department sagainst D forms @ 5% Rs. 11,45,034-00 Rs....
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....les Tax Act has been dismissed by a Division Bench of the High Court. 8. The High Court in its judgment noticed the decisions of this Court in Associated Cement Companies Ltd. v. Commissioner of Customs [(2001) 4 SCC 593]; Tata Consultancy Services v. State of A.P. [(2005) 1 SCC 132]; and Tata Consultancy Services v. Municipal Corporation of Greater Bombay & Anr. [(2006) 3 SCC 1] and held : In the light of the three judgments stated supra, what is clear to us is the services rendered by the appellant is an indivisible activity and liable to levy of tax. The authority in Annexure-A after noticing the material facts, has chosen to hold that in the bills there is a separate charge made as content development concept design, photography scanning and other charges such as system charges including colour sketch pen or computer used design software etc. Ultimately, the brochures come out. Considering the entire ambit of activity of the dealer, it is seen that it is a comprehensive contract or supply of printed material developed by the company. The bills also indicate the entire activity tantamounts to making indivisible contract in a divisible contract....
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....mpany (supra) as also the Constitution Bench decision of this Court in Tata Consultency and Bharat Sanchar Nigam Ltd. v. Union of India [(2006) 3 SCC 1]. 11. At the outset, we must express our reservation in regard to the question as to whether the appellant having already undergone the process of regular assessment before the assessing authority, an application under Section 60 of the Karnataka Value Added Tax Act, 2003 was maintainable. The purpose for which such a proceeding is taken recourse to is well known. When a decision of a competent authority is not known and an entrepreneur intends to know as to what would be his liability under the taxing statute, such a proceeding is ordinarily taken recourse to. But it is not necessary for us to consider the matter any further. In this case, the order of assessment was complete. The State did not prefer any appeal there against. The process of accounting or the methodology adopted by the assessee for the purpose of payment of both service tax as also the value added tax attained finality at least for that year. 12. Be that as it may, as the order of the competent authority under Section 60....
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....er 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. 16. By reason of the said provision, therefore, a legal fiction was created so as to make the supply of goods involved in a works contract, subject to tax. A transaction of the present description was not contemplated. The question came for consideration again in Builders Association of India & Ors. v. Union of India & Ors. [(1989) 2 SCC 645] and M/s.Gannon Dunkerley & Co. & Ors. v. State of Rajasthan & Ors. [(1993) 1 SCC 364]. It has ....
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....odity. They are visible to the senses. They may be a medium through which the intellectual property is transferred but for the purpose of determining the question as regard s leviability of the tax under a fiscal statute, it may not make a difference. A program containing instructions in computer language is subject-matter of a licence. It has its value to the buyer. It is useful to the person who intends to use the hardware viz. the computer in an effective manner so as to enable him to obtain the desired results. It indisputably becomes an object of trade and commerce. These mediums containing the intellectual property are not only easily available in the market for a price but are circulated as a commodity in the market. Only because an instruction manual designed to instruct use and installation of the supplier program is supplied with the software, the same would not necessarily mean that it would cease to be a goods . Such instructions contained in the manual are supplied with several other goods including electronic ones. What is essential for an article to become goods is its marketability. 19. The question yet again came up for consideration before a Three J....
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....nant nature test. 50. What are the goods in a sales transaction, therefore, remains primarily a matter of contract and intention. The seller and such purchaser would have to be ad idem as to the subject-matter of sale or purchase. The court would have to arrive at the conclusion as to what the parties had intended when they entered into a particular transaction of sale, as being the subject-matter of sale or purchase. In arriving at a conclusion the court would have to approach the matter from the point of view of a reasonable person of average intelligence. 20. We may, at this juncture, also notice the decision of this Court in Associated Cement Company (supra). The question which arose for consideration therein was as to whether any intellectual property contained in a software would be subject to custom duty within the meaning of Section 2(22) of the Customs Act, defining goods. A three Judge Bench of this Court sought to make a distinction between such a contingency arising under the Customs Act involving a works contract and a contract of sale stating : 32. In the sales tax cases referred to hereinabove no doubt the question which aros....
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.... statute. In the matter of interpretation of a taxing statute, as also other statutes where the applicability of Article 246 of the Constitution of India, read with Seventh Schedule thereof is in question, the Court may have to take recourse to various theories including aspect theory , as was noticed by this Court in Federation of Hotel & Restaurant Association of India, etc. v. Union of India& Ors. [(1989) 3 SCC 634]. 25. If the submission of Mr. Hegde is accepted in its entirety, whereas on the one hand, the Central Government would be deprived of obtaining any tax whatsoever under the Finance Act, 1994, it is possible to arrive at a conclusion that no tax at all would be payable as the tax has been held to be an indivisible one. A distinction must be borne in mind between an indivisible contract and a composite contract. If in a contract, an element to provide service is contained, the purport and object for which the Constitution had to be amended and clause 29A had to be inserted in Article 366, must be kept in mind. 26. We have noticed hereinbefore that a legal fiction is created by reason of the said provision. Such a legal fi....