TaxTMI 
TaxTMI 
2016 (10) TMI 938
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....230/- on the ground that the appellant-Company had sold the home appliances under the brand name "Sansui". To put it more clear, the Assessing Authority- the respondent-State, while scrutinizing the second sale exemption as claimed by the appellant-Company, found that it is the brand name holder of "Sansui" and hence the turnover of the items sold under "Sansui" brand name will be treated as first sale under Section 5(2) of the KGST Act. c) The appellant-Company was served with a show cause notice dated 15.02.2004 by the Office of the Assistant Commissioner (Assmt.), Ernakulam against which a reply was filed on 15.03.2004 denying the averments of the notice stating that the appellant-Company is not the holder of the brand name "Sansui" indicating that the said brand name is owned by M/s Sansui Electric Co. Ltd. Japan. The Assessing Authority, vide order dated 22.03.2004, dismissed the claim of the appellant-Company with regard to the brand name holder. Aggrieved by the order dated 22.03.2004, the appellant-Company went in appeal before the Deputy Commissioner (Appeals), Ernakulam along with an application for stay. The Deputy Commissioner (Appeals), vide order dated 30.09.2004, di....
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....ing authority has rightly established by giving legitimate reasoning that the appellant-Company is the brand name holder of "Sansui" goods. Also from the facts and materials on record and from the observations of the assessing authority, it could be easily gauged that during the relevant year, the appellant-Company has marketed the products under the brand name "Sansui". 6) The appellant-Company is a registered dealer under the KGST Act in Kerala, engaged in marketing products like television, washing machine etc. manufactured under the brand name "Sansui". The entire products are purchased by the appellant-Company from Videocon International Ltd. In fact, Videocon International Ltd., the holding company, brings the goods to Kerala on stock transfer and the entire goods were sold to its subsidiary, the appellant-Company, for marketing in Kerala. Even though Videocon International Ltd. returned the entire sales as first sales on which they have collected tax from the subsidiary company, the appellant-Company was assessed for sales tax by the Assessing Officer while scrutinizing the second sale exemption as claimed by the appellant-Company and found that the goods in respect of whic....
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....y of Videocon International Ltd. Going by the evidence on record, we have to only hold that the respondent is only a subsidiary of Videocon International Ltd., which marketed the entire products through the respondent in Kerala. Further, from the terms of the agreement between the respondent's holding company and Sansui Electric Ltd., Japan, extracted in Tribunal's order, we notice that Videocon International Ltd. and their subsidiary companies are allowed to use the trademark and brand name of Sansui in India. So much so, Videocon International Ltd., which made the first sales to the appellant, is also the holder of the brand name "Sansui" in India." (emphasis supplied by us) 9) As is clear from the language itself that in order to attract sub-Section (2) of Section 5, the following conditions are to be satisfied (i) Sale of manufactured goods other than tea; (ii) Sale of the said goods is under a trade mark or brand name; and (iii) The sale is by the brand name holder or the trade mark holder within the State. If all the aforesaid conditions are satisfied, the sale by the brand name holder or the trade mark holder shall be the first sale for the purposes of the KGST A....
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.... control in respondent company as per the facts and various filings with the Regulatory Authorities. However, the powers of the management are vested with the Board of Directors "Director Board") of the company and I am one of the directors of the said respondent company..... 3. I respectfully say and submit that at that time, as per the facts and various filings, Videocon International Ltd. was having 15.31% shareholding in the respondent company and various other companies of Videocon Group were holding remaining equity share capital of the respondent company. We, Dhoot Brothers are promoters of respondent company. It is closely held company. 5. I further say that Dhoot Brothers are also promoters of Videocon International Ltd. and based on the facts and the filings made by the company, from time to time, with the Stock Exchanges, the promoters together with various Videocon Group Companies were holding 35.11% of equity shares in Videocon International Ltd. as on 31/3/0000. Copy of shareholding pattern of Videocon International Ltd as on 31/3/2000 is produced herewith and marked as Annexure R-1 (G). 6. I respectfully further say and submit that at no point of time the re....
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....er or the trade mark holder within the State. If the above three conditions are satisfied, the sale by the brand name holder or the trade mark holder shall be the first sale for the purpose of the Act. 10. The aforesaid sub-section commences with a non obstante clause i.e. irrespective of Section 5(1) of the Act or any other provision under the Act. The said sub-section speaks of a sale made by a brand name holder or the trade mark holder within the State. The legislature deems that such a sale by the brand name holder or the trade mark holder shall be the first sale within the State. In our opinion this is the only possible construction that can be given to sub-section (2) of Section 5 of the Act." Further, we are of the view that when a product is marketed under a brand name, the Assessing Authority is entitled to assume that the sale is by the holder of the brand name or by a person, who is entitled to use the brand name in India. Apart from this, in this case, the marketing is actually done by fully owned subsidiary and/or a group company of the holding company, which was allowed to use the brand name "Sansui". 14) Brand name has no relevance when the products are manu....