AI Drafter 
TaxTMI 
TaxTMI 
2018 (7) TMI 972
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....it situated at Village Mahatoli, Banmore 476444, District Morena, Madhya Pradesh. The petitioner is registered under VAT Act, 2002 and bears TIN Registration No.230 25305515. The petitioner inter-alia is engaged in the manufacturing of Beer under B-3 Licence issued by the Excise Commissioner of Madhya Pradesh, under the provisions of Madhya Pradesh Beer and Wine Rules 2002 framed by the State Government of Madhya Pradesh in exercise of the powers conferred by sub-section (1) and clause (a), (d), (e), (f), (g) and (h) of sub- section (2) of Section 62 of the Madhya Pradesh Excise Act, 1915. It is also a matter of record that during the period under consideration with SKOL Breweries Ltd. SAB Miller India Limited the petitioner entered into a license agreement on 30.1.2010 for the endorsement/sub-licencing of the petitioner's brewery license in favour of SKOL against the stipulated consideration of Rs. 4,14,00,000/- per annum as license endorsement for a period from 1.2.2010 to 30.1.2014. And the lease deed dated 29.4.2010, for the lease of the petitioner's manufacturing Unit situated in District Morena, Madhya Pradesh. It is stated that the lease deed was a composite lease fo....
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....which otherwise is not sale, thus has committed a jurisdictional error. It is urged that the assessing authority by vivisecting plant and machinery from the land and imposing tax @ 13% tax on such plant and machinery committed gross error of law. Consequently, imposing interest and the penalty there is also suffers the vice of jurisdictional error, is illegal, erroneous and unconstitutional. (6) It is accordingly contended that, there being a composite and indivisible transaction of leasing of brewery of the petitioner as a whole and on 'as is whereis basis', for a lump sum lease rent, without assigning any individual values to any components and lease of immovable property pure and simple, the State has no legislative competence to enact a law and charge tax under entry 54, list II of the Seventh Schedule of the Constitution. That the transaction falls within the domain of Union Parliament under Article 248 read with Entry 97, list I of Seventh Schedule and the exclusive transaction being subject to service tax, the VAT, which is a provincial tax is mutually exclusive, beyond the competence of State under Entry 54 Part II Seventh Schedule. (7) In the alternative, it ....
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....,000/- 2014-15: Rs. 2,37,33,333/-. The petitioner paid service tax thereon @ 12.30%. It is urged that in the audit report submitted by the petitioner, the fixed asset valued by the petitioner for respective year is : 2012-2013: Rs. 41,17,67,104/- 2013-2014: Rs. 41,17,67,104/- 2014-2015: Rs. 41,17,67,104/- It is further contended that out of total value of the said fixed asset, the petitioner bifurcated the same as under : Land : 2012-13: Rs. 35,02,418/- 2013-14: Rs. 35,02,418/- 2014-15: Rs. 35,02,418/- Building: 2012-13: Rs. 6,24,75,177/- 2013-14: Rs. 6,24,75,177/- 2014-15: Rs. 6,24,75,177/- Plant and Machinery: 2012-13: Rs. 34,57,89,509/- 2013-14: Rs. 34,57,89,509/- 2014-15: Rs. 34,57,89,509/- It is contended that the total lease rent received by the petitioner as under : 2012-13: Rs. 2,07,00,000/- 2013-14: Rs. 2,07,00,000/- 2014-15: Rs. 2,37,33,333/- The percentage as per audit report comes to : 2012-13 : 2013-14 2014-15 1. Land : 0.92% 0.92% 0.92% 2. Building : 16.47% 16.47% 16.47% 3. Plant & Machinery : 83.97% 83.97% 83.97% (11) It is ur....
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....me other form) invoked in the execution of a works contract; (c) a tax on the delivery 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; (18) In BSNL Vs. Union of India : (2006) 3 SCC 1, Three Judges Bench of the Supreme Court, dwelling briefly into the legal histo....
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....ds, the transaction must have the following attributes: (a) there must be goods available for delivery; (b) there must be a consensus ad idem as to the identity of the goods; (c) the transferee should have a legal right to use the goods-consequently all legal consequences of such use including any permission or licences required therefor should be available to the transferee; (d) for the period during which the transferee has such legal right, it has to be the exclusion to the transferor- this is the necessary concomitant of the plain language of the statute viz. a "transfer of the right to use" and not merely a licence to use the goods; (e) having transferred the right to use the goods during the period for which it is to be transferred, the owner cannot again transfer the same right to others." (20) In the case at hand, in our considered opinion these attributes are present in relationship between the lessor and the lessee. (21) In Imagic Creative (P.) Ltd. V. Commissioner of Commercial Taxes and others : (2008) 2 SCC 614, it is held: "29....A distinction must be borne in mind between an indivisible contract and a compos....
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....ion of the contracting parties which is paramount for ascertaining whether the plant and machinery can be treated to be one embedded in earth. In Triveni Engineering & Industries Limited (supra) the scope of Section 2(d) read with Section 3 of Central Excise Act, 1944, was under consideration which is not the case at present. (25) In M/s Kranti Steel Pvt. Ltd. (supra), the controversy cropped up under the Stamp Act, 1899. Whereas, in the case at hand, as evident, we are concerned with the composite renting of immovable property along-with the buildings, plant and machinery. And the prominent feature of the lease agreement reflects the transfer of right to use plant and machinery for cash, which are "goods" as defined under Section 2(m) of VAT Act, 2002. (26) In Sunrise Associates vs. Govt. of NCT of Delhi and Others [(2006) 5 SCC 603], it is held: "35. The word 'goods' for the purposes of imposition of sales tax has been uniformly defined in the various sales tax laws as meaning all kinds of movable property. The word "property" may denote the nature of the interest in goods and when used in this sense means title or ownership in a thing. The word may also be....