TaxTMI 
TaxTMI 
2020 (6) TMI 57
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....the meaning of Section 2(g) of TNVAT, 2006 r/w Article 366(29A) of the Constitution of India. 4. The petitioner replied to the above notice. The 1st respondent proceeded to pass two orders separate orders on 30.06.2014 for the Assessment Years 2008-2009 and 2009-2010 respectively. 5. Aggrieved by the said orders, the petitioner preferred appeals before the Appellate Deputy Commissioner. The petitioner pre-deposited 25% of the disputed tax. 6. The Appellate Deputy Commissioner thereafter asked the petitioner to pre-deposit another 25% of the disputed tax by an order dated 25.11.2014 in S.P.Nos. 6 and 7 of 2014. 7. The petitioner therefore filed W.P.Nos.34466& 34467 of 2014. By an order dated 23.12.2014, these writ petitions were allowed with the following directions: " The learned counsel appearing for the petitioner invited the attention of this Court to an earlier order dated 24.07.2014 in W.P.(MD)No.12123 of 2014 in the case of T.V.S.Sri Chakra Limited vs. Assistant Commissioner, Madurai, wherein, this Court after considering a similar case, directed instead of bank guarantee, the petitioner therein can furnish a personal bond. The petitioner has raised se....
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....in appeals are remanded back to the Assessing Officer, the levy of penalities for Rs. 15,01,875/- and Rs. 47,34,270/- respectively for the years 2008-09 and 2009-20 are also set aside and remanded back to the Assessing Officer with the direction to consider various judicial decisions before arriving for the above years. This portion of appeal is remanded." 9. Pursuant to the aforesaid order dated 19.08.2016, 2nd notices dated 14.03.2016 were issued to the petitioner by the 1st respondent for the respective Assessment Years. The petitioner replied to the respective notices. Thereafter, another notice was issued to the petitioner on 20.06.2016 for both the Assessment Years. The petitioner separately replied to the aforesaid notice dated 20.06.2016 on 27.06.2016 for the respective Assessment Years. 10. Thereafter, the impugned orders dated 29.07.2016 came to be passed by the 1st respondent for the respective assessment years. By the impugned orders, the 1st respondent has noted inter-state purchase of several goods from other states amounting to Rs. 1,54,46,232/- during the Assessment Year 2008-09 and Rs. 4,04,90,379/- for the Assessment Year 2009-10. 11. On the aforesaid int....
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.... authority is empowered to consider the fact and nature of the business now putforth by the dealers. Since there is no error apparent on the face of records, the dealers are informed that their request to issue revision orders is not feasible of compliance. 15. Pursuant to the aforesaid refusal of the rectification application, demand notice dated 20.10.2016 has also been issued. Challenging the impugned orders dated 29.07.2016, the petitioner Ascend Telecom Infrastructure Pvt. Ltd. has filed the present Writ Petitions before this Court. 16. Petitioner has challenged the tax demanded primarily on the ground that the petitioner is a provider of Passive Infrastructure service for the Mobile Telecommunication Operators (MTO) which is outside the proviso of VAT. It is stated that the petitioner acquired such facilities from existing mobile telephone company and was started with view to reduce the cost of telecom service provided by them. 17. Assailing the impugned orders passed by the 1st respondent, it is the contention of the petitioner that the impugned orders have been passed pursuant to notices dated 14.03.2016 for the respective Assessment Years which do not contain a....
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....ndered in Essaar Telecom Infrastructure Pvt.Ltd., Vs. Union of India, 2012 (275) E.L.T.167 (Kar.), wherein, the Court held as follows:- 21. Various decisions rendered and referred to by the petitioner's counsel are in the context - what is movable and immovable. As a matter of fact finding, the re-assessing authority having regard to the nature of the equipment used and its fixation to the earth i.e., civil foundation or on the roof of the building for proper functioning and the nature of the activity that is being transferred to the customers viz., telecom companies to use the equipment i.e., the tower raised and in consideration petitioner receives some amount which are in the form of rents, has proposed tax under the provision of VAT Act, treating it as lease of movable. Further, having regard to the nature of the agreement entered into and the nature of transaction, the effective control is with the petitioner and, the component of delivery is also involved and the maintenance and over all control is also with the petitioner, it could be specifically said that the right to use the goods has been transferred by the petitioner to the telecom companies and that very m....
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....ents providing for attracting different nature of levy. It is, therefore, difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract; irrespective of the element of service provided. The approach of the assessing authority, to us, thus, appears to be correct. 34. We may notice that the concept of aspects theory which had found echoes in State of U.P. Another v. Union of India & Anr. [(2003) 3 SCC 239] has expressly been overruled by a Three Judge Bench in Bharat Sanchar Nigam Ltd. (supra) stating : 78. But if there are no deliverable goods in existence as in this case, there is no transfer of user at all. Providing access or telephone connection does not put the subscriber in possession of the electromagnetic waves any more than a toll collector puts a road or bridge into the possession of the toll payer by lifting a toll gate. Of course the toll payer will use the road or bridge in one sense. But the distinction with a sale of goods is that the user would be of the thing or goods delivered. The delivery may not be simultaneous with the transfer of the right to use. But the goods must be in existence and deliver....
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....a High Court in Antrix Corporation Ltd Vs. The AC, (2010) 29 VST 308 was not considered in the cases cited by the learned counsel for the petitioner and therefore those decisions cannot be relied upon. 33.The learned counsel for the respondents relied on the following cases in support of the submission:- i. Essar Telecom Infrastructure (Pvt.) Ltd., Vs. Union of India and Others, (2012) 52 VST 306 (Kar). ii. Antrix Corporation Ltd. Vs. Assistant Commissioner of Commercial Taxes, Bangalore and Others, (2010) 29 VST 308 (Kar.). iii.M/s.Rashtriya Ispat Nigam Ltd., Vs. The Commercial Tax Officer, Company Circle, Visakhapatnam and Another, 1989 SCC OnLine AP 413. iv. State of A.P Vs. Rashtriya Ispat Nigam Ltd., (2002) 3 SCC 314. v. Idea Mobile Communication Limited Vs. Commissioner of Central Excise and Customs, Cochin, (2011) 12 SCC 608. vi. Vodafone Mobile Services Limited Vs. Commissioner of Service Tax, Delhi, 2018 SCC OnLine Del 12302. vii.Commissioner of Central Excise, Ahmedabad Vs. Solid and Correct Engineering Works and Others, (2010) 5 SCC 122. viii.Sirpur Paper Mills Limited Vs. Collector of Central Exc....
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....fer should be to the exclusion of the owner and others and exclusively in favour of the person in whose favour such transfer of right to use is made. 39. From the facts that has been disclosed in the documents filed before this court, it is evident that there is no exclusive transfer of the temporary shelter or the transmission tower/mast in favour of any one of the Mobile Telecommunication Operators. The space in the shelter and the transmission tower/mast is given on shared basis and charged separately therefore it would not come within the fold of the extended definition of saleSection 2(33) of the TNVAT Act, 2006. 40. The decision of Karnataka High Court in Antrix Corporation Ltd. Vs. Assistant Commissioner of Commercial Taxes, Bangalore and other, (2010) 29 VST 308 (Kar) was on a different issue altogether. There, the appellant had provided marketing and contract services for hiring transponders of INSAT satellites and was required to carry out certain activities on behalf of the Department of Space including billing of customer's collection of service and remittance, realization of payments against invoice raised on customers and providing service support for marketing ....
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....o the dominant nature test to be applied to a composite transaction not covered by Article 366(29-A). 45. It has further observed in para 43 and 44 that barring the transactions which are mutant sales are limited to the clauses of Article 366(29-A), all other transactions would have to qualify as sales within the meaning of the Sales of Goods Act, 1930 for the purpose of levy of sales tax. 46. It further observed that of all the different kinds of composite transactions, the drafters of the Forty-sixth Amendment chose only three specific situations namely:- (a) a works contract; (b) a hire-purchase contract; and (c) a catering contract, to bring them within the fiction of a deemed sale. Of these three, the first and third involve a kind of service and sale at the same time. Apart from these two cases where splitting of the service and supply has been constitutionally permitted in sub-clauses (b) and (f) of clause (29-A) of Article 366, there is no other service which has been permitted to be so split. However, while making the above operation, the Court did not talk about "Transfer of Right to Use" in these two paragraphs. 47. It further observed that "For example, the sub....
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.... (2002) 3 SCC 314, the Hon'ble Supreme Court has held that the transaction there did not involve transfer of right to use the machinery in favour of contractors as the effective control was not transferred in favour of the contractor. The contractor was not free to make use of the machinery for the works other than the project work of Rashtriya Ispat Nigam Ltd. In fact, the Division Bench of the A.P.High Court has very beautifully explained the concept of transfer of right to use in the following passage in Rashtriya Ispat Nigam Ltd. Vs. CTO, (1990) 77 STC 182, which reads as under: "9. The essence to transfer is passage of control over the economic benefits of property which results in terminating rights and other relations in one entity and creating them in another. While construing the word 'transfer' due regard must be had to the thing to be transferred. A transfer of right to use the goods necessarily involves delivery of possession by the transferor to the transferee. Delivery of possession of a thing must be distinguished from its custody. It is not uncommon to find the transferee of goods in possession while transferor is having custody. When a Taxi cab is hired un....
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....is no sale even if the contract could be disintegrated. The test for deciding whether a contract falls into one category or the other is to as what is "the substance of the contract. 53. Ultimately, the Court has held as follows: "92.For the reasons aforesaid, we answer the questions formulated by us earlier in the following manner: (A) Goods do not include electromagnetic waves or radio frequencies for the purpose of Article 366(29-A)(d). The goods in telecommunication are limited to the handsets supplied by the service provider. As far as the SIM cards are concerned, the issue is left for determination by the assessing authorities. (B)There may be a transfer of right to use goods as defined in answer to the previous question by giving a telephone connection. (C)The nature of the transaction involved in providing the telephone connection may be a composite contract of service and sale. It is possible for the State to tax the sale element provided there is a discernible sale and only to the extent relatable to such sale. (D)The issue is left unanswered. (E)The 'aspect theory' would not apply to enable the value of the s....