TaxTMI 
TaxTMI 
2017 (12) TMI 1847
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by the Railway department to the petitioner. 3. According to the counsel for the petitioner, the transfer of right to use was an interstate sale which was concluded in the State of West Bengal as the agreement to use of railway wagons was executed in West Bengal and goods were transferred to the railway department also at other states. As per the agreement, South Eastern Railway was a lessee and L & T was the lessor. The said Company subsequently got merged and was taken over by M/s Ultratech Cement Ltd. As a result of the merger the rights bestowed under the contract/agreement continued in favour of the petitioner' new company. It is the contention of the counsel for the petitioner that since the agreement was executed in West Bengal and that no transaction whatsoever transpired within the jurisdiction of Chhattisgarh, the State of Chhattisgarh could not have levied tax. According to the petitioner, the levy of tax on the lease rent which is being collected by the railway department is arbitrary, illegal and without jurisdiction on the ground of situs of sale being outside the state of Chhattisgarh and transfer of goods made to the railway also being at two other states and no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at a place outside the territories of State of Chhattisgarh and the wagons also not being stationed within the territories of Chhattisgarh nor do they situate within the territories of Chhattisgarh. Therefore once when as per the agreement, the goods i.e. wagons stood transferred immediately on manufacture to the railway authorities and the transfer being made outside the State of Chhattisgarh, the amount received as lease charges cannot be accepted as a taxable income under the VAT Act. 8. The assessing officer refused to accept the same on the ground that it is only the agreement which was executed in Calcutta, but the benefits are reaped in the State of Chhattisgarh, hence the lease rent received by the petitioner's establishment would be leviable of tax in the State of Chhattisgarh. The petitioner had also preferred a revision challenging the order of assessing officer. The Revisional authority also vide its order dated 30.05.2015 dismissed the revision petition affirming the order of assessing authority on the said issue. 9. According to the petitioner the sales can only be taxed if they are intraState sales and if it is inter-State sales or sale in course of import or e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....8 S.C. 563, "Builders Association of India vs. Union of India" (1989) 2 SCC 645, "Gannon Dunkerley & Company Limited vs. State of Rajasthan" (1993) 1 SCC 364. 13. Per contra, counsel for the State opposing the petitions submitted that the entire writ petition is without any substantial basis and misconceived on account of the fact that the lease charges in the instant case is being paid at Bilaspur by South East Central Railway of which the Head Quarter is at Bilaspur. According to the State counsel, the term sale is defined under the Act in a comprehensive manner and includes transfer of right to use of goods for any purpose. According to the State counsel, once if it is established that the beneficiaries from the agreement being the zonal railway with its head quarter at Bilaspur and the rent being accepted and wagons being used by an establishment located in the State of Chhattisgarh, for all practical purposes, it has to be presumed that the transactions between the Railway and the petitioner establishment as a consequences to the agreement takes place within the territory of Chhattisgarh. Therefore, the State of Chhattisgarh would have the powers of imposing tax and as such....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ly 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;] 15. Similarly, under the 7th schedule of the Constitution under List-1, Entry 92A brings taxes on the sale or purchase of goods other than newspapers where such sale or purchase takes place in the course of another State trade or commerce and Entry 54 under List 2 i.e. said list also envisages taxes on the sale or purchase of goods other than newspaper, subject to the provisions of Entry 92A of List 1. 16. Having heard the rival contentions put forth on either side, the moot question which requires adjudication in the instant case is as to whether the imposition of tax under the VAT Act on lease charges received by the petitioner company from the Railway is proper, legal and justified or not. VAT Act is an enactment by the State Legislature under entry 54 of list 2 schedule 7 of the Constitution of India. The learned Assessing Officer in the Commerci....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t has been provided in the definition. For ready reference the explanation portion is reproduced herein under:- "Explanation:- (a) Notwithstanding anything contained in the Sales of Goods Act, 1930 (III of 1930), where a sale or purchase of goods takes place in pursuance of a contract of sale, such sale or purchase shall be deemed for the purposes of this Act to have taken place in the State of Chhattisgarh irrespective of the place where the contract of sale or purchase might have been made, if the goods are within the State- (i) in the case of specific or ascertained goods, at the time the contract of sale or purchase is made; and (ii) in the case of unascertained or future goods, at the time of their appropriation to the contract of sale or purchase by the seller or by the purchaser, where the assent of the other party is prior or subsequent to such appropriation; and (b) where there is a single contract of sale or purchase of goods situated at more places than one, the provisions of clause (a) shall apply as if there were separate contracts in respect of the goods at each of such places;" 19. If we consider the explanation clause it clearl....