TaxTMI 
TaxTMI 
2020 (6) TMI 84
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....itioner with its clients. Under the Master Service Agreement, the petitioner allows these Mobile Telecommunication Operators (MTO's) to install their active infrastructures such as Base Transceivers Station (BTS) and antenna/disk and other accessories required for providing mobile telecom services to their customers. The Base Transceivers Station (BTS) are sheltered inside the temporary shelter while the antenna/disk is placed on the tower/mast of the petitioner. 4. Petitioner had obtained registration under the TNVAT Act, 2006 and had procured various goods against 'C' Form for setting up passive infrastructure and filed returns under the TNVAT Act, 2006. The dispute in these Writ Petitions is confined to the Assessment Years 2008-09 and 2009-10. For these Assessment Years, the petitioner had declared the following taxable turnover under the provisions of the aforesaid Act:- Serial No. Assessment Year Taxable Turnover Declared Rs. Tax Paid Rs. 1 2008-09 1, 26, 68, 089 15, 81, 386 2 2009-10 0 0 5. These assessments were also completed accepting the returns filed by the petitioner vide two separate assessment orders dated 24.11.2011 in terms....
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....as "lessor" and such receipts were received for the usage of passive infrastructure from the mobile operators. The lease charges received is not only for permitting the mobile operator to mount their equipments on the tower but also for having used the other infrastructure facilities (viz. providing DG set, power management system, air conditioner, battery bank etc) as specifically required by the mobile operators and have been supplied by the dealer. The dealer offered two types of towers with infrastructure facilities. Those are Roof Top Tower and Ground Based Tower. Both the towers are having same infrastructure facilities. The agreements were entered with various mobile operators for a specific period. The authorized representative was requested to explain how the tower will be removed in the event of termination of agreement. The authorized representative stated that the towers are never permanently affixed to earth or on the multi-storied building and in the event of termination of agreement the towers are dismantled and relocated from one place to another with infrastructure facilities, the towers are shifted to some other place. Hence, it is evident that b....
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....le operator terminated the agreement the facilities of using tower with infrastructure facilities are offered/transferred to some other mobile operators. The agreement protects the mobile operator to use the facilities during the tenure of the agreement. In other words, during the period of agreement the facilities could not be transferred to any other mobile operator. Further the mobile operator has no right to sub let to others. "Goods" may be a tangible or an intangible and having utility, capable of being bought and sold, transmitted, transferred, delivered, stored and possessed. Hence, there is right to use the capacity of tower with infrastructure facilities as per the agreement. The consideration received from the mobile operators for offering access to towers with infrastructure facilities amounts to lease receipts falling under section 4 of the TNVAT Act, 2006. Moreover the equipments and infrastructures rented by the dealers were based on prior agreements of the contract which stipulates various clauses including liability to tax under VAT. In the agreement executed between them and the sharing operators, Clause 7.1.3 of the agreement s....
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....du and Pondicherry, no corroborative evidences were produced. In the absence of corroborative evidence the receipts are taken as Tamil Nadu receipt and the proposal modified accordingly. * In view of the above discussion the contention of the dealer that they are providing only service and the receipts represent service charges is not acceptable. Therefore, the turnover of Rs. 142,52,77,649.00 is assessed at 12.5% under section 4 of the TNVAT Act, 2006. In fine, the dealers are reassessed under section 27 of the TNVAT Act, 2006 on the following turnover in addition to the turnover already assessed based on the returns for the year 2008-2009 as detailed below. Details Turnover Tax due 1. Turnover and Tax originally reported Rs. 1,26,68,089.00 Rs. 15,81,386.00 2. Levy of tax on lease rental receipts at 12.5% Rs. 142,52,77,649.00 Rs. 17,81,59,706.00 Total and Taxable redetermined Rs. 143,79,45,738.00 Rs. 17,97,41,092.00 ** In view of the above discussion the contention of the dealer that they are providing only service and the receipts represent service charges is not acceptable. Therefore, the turnover of Rs. 637,01,41,587.00 is a....
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....he petitioner and therefore those decisions cannot be relied upon. 17. The learned 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 Excise, Hyderabad, (1998) 1 SCC 400. ix. Federation of Hotel and Restaurant Association of India, Etc Vs. Union of India and Others, (19....
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....ree Celsius as to protect the equipments. Apart from that the petitioner has also offered Uninterrupted Power Supply (UPS) for converting electricity AC current from 220, Volts AC current into (-) 48 DC which is essentially required to run the mobile operators transmission equipments without disruption. This activity is performed by Power Management System of the petitioner. 23. Today, by an order in W.P.Nos.40159 & 40160 of 2016, an identical situation was considered and the said Writ Petitions were allowed. The relevant portion of the order is reproduced below:- 34. I have considered the arguments advanced on behalf of the petitioner and the respondents. The petitioner no doubt provides passive infrastructure service to be Mobile Telecommunication Operators (MTO.). Under the business model, the petitioner has the real estate namely the lease of land on which it has erected a temporary shelter which is equipped with Air Conditioners and is connected with power supply generators and antenna. In the temporary shelter, the Base Transceivers of Mobile Telecommunication Operators are placed. Next to be temporary shelter the transmission tower/mast is erected. The powe....
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....he 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 INDAT/G-SAT space segment capacity both in local and global markets. There, it was concluded that there was a transfer of right to use the "leased capacity" under the contract of agreement executed by the Department of Space with the customers and the leased space segment capacity in a transponder of a satellite was "goods" within the meaning of Article 366(12) of the Constitution of India. 41. It was therefore held that the transaction came within the scope of Article 366(29A)(d) of the Constitution of India, inasmuch as, there was delivery of possession of the goods by transfer (Department of Space) to the transferee (customer) and in law, the transferee had effective control over the goods, i.e., "space segment capacity" in the transponder of satellite, though its technical operation was handled by the Department of Space. 42. In BSNL Vs. Union of India, (2006) 3 SCC 1, the Hon'ble Supreme Court observed that "Gannon Dunkerley [State of Madras Vs. Gannon Dunkerley & C....
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....s 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-clauses of Article 366(29-A) do not cover hospital services. Therefore, if during the treatment of a patient in a hospital, he or she is given a pill, can the Sales Tax Authorities tax the transaction as a sale? Doctors, lawyers and other professionals render service in the course of which can it be said that there is a sale of goods when a doctor writes out and hands over a prescription or a lawyer drafts a document and delivers it to his/her client? Strictly speaking, with the payment of fees, consideration does pass from the patient or client to the doctor or lawyer for the documents in both cases." 48. While answering the above illustration, in para 45, the Court observed as under:- 45.The reason why these services do not involve a sale for the purposes of Entry 54 of List II is, as we see it, for reasons ultimately attributable to the principles enunciated in Gannon Dunkerley case [State of Madras v. Gannon Dun....
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....ssarily 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 under "Rent-a-car" scheme and a cab is provided, usually driver accompanies the cab there the driver will be in custody of the car though the hirer will have the possession and effective control of the cab. This may be contrasted with the case when a taxi car is hired for going from one place to another there the driver will have both the custody as well as the possession; what is provided is service on hire. In the former case, there was effective control of the hirer (transferee) on the cab whereas in the latter case it is lacking We may have many examples to indicate this difference." 51. In Aggarwal Bros. Vs. State of Haryana, (1999) 9 SCC 182, the Hon'ble Supreme Court has held that when the assessee had hired shuttering in favour of contractors to use it in the course of construction of buildings it was found that possession of the shuttering materials was transferred by the assessee to the cust....
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....site 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 services to be included in the sale of goods or the price of goods in the value of the service." 54. The above view was concurred by Hon'ble Dr.Justice A.R.Lakshmanan in para 97, which is extracted below. 97.To constitute a transaction for the transfer of the right to use the goods, 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 permissions 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 "tran....