TaxTMI 
TaxTMI 
2008 (7) TMI 266
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....eral Sales Tax Act, 1959 [for short, 'TNGST Act'] and, therefore, the petitioner is producer and processors of such software for export are entitled to the beneficial provisions of Sec. 8(3) of the CST Act r/w Rule 13 of the Central Sales Tax (Registration and Turnover) Rules, 1957. In the light of the declaration, they sought for a restrained order to the respondents from refusing to issue Form 'C' Declaration and initiating penalty proceedings under Sec.10-A of the CST Act as illegal, unconstitutional and without jurisdiction. 2. In W.P. No. 38545 of 2005, the challenge is to the order dated 31.10.2005 passed by the first respondent pursuant to the direction issued by this Court. Earlier, the petitioner moved this Court with W.P. No. 30101 of 2005 and this Court, vide order dated 17.9.2005, set aside the earlier order dated 01.9.2005 passed by the first respondent and directed the first respondent to consider the report of the petitioner dated 01.7.2005 in the light of the judgment of the Supreme Court and other relevant materials. The first respondent, after considering the request of the petitioners, rejected the plea of the petitioner, which is under challen....
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.... 9. In passing the order dated 10.01.2002, the Department relied upon the judgment of the Andhra Pradesh High Court in Tata Consultancy Services v. State of Andhra Pradesh [(1997) 105 STC 421]. Subsequently, the matter was taken to the Supreme Court. The Supreme Court decided the issue vide its judgment in Tata Consultancy Services v. State of Andhra Pradesh [2005 (1) SCC 308. The Constitution Bench of the Supreme Court, by its judgment, held that the branded software is 'goods'. They were also in agreement with the submission made by the petitioner in that case that there was no distinction between branded and unbranded software. But the majority opinion in the said judgment held that as they were not dealing with the unbranded software when it is marketed / sold as a good and are not expressing any opinion on that issue. 10. However, S.B. Sinha, J., in his concurring opinion in the very same judgment in paragraph 81, observed as follows:- Para 81: "It is not in dispute that when a program is created it is necessary to encode it, upload the same and thereafter unload it. Indian law, as noticed by my learned Brother, Variava, J., does not make any distinction betwe....
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....ble or intangible or incorporeal." [Emphasis added] 12. It is clear from the said order that the authority went only by the opinion expressed by the majority and except for referring to it did not give due consideration to the concurring opinion made by S.B. Sinha, J. Be that as it may. The said question once again, came up before the Supreme Court in the judgment relating to Bharat Sanchar Nigam Ltd. and another v. Union of India and others [2006 (3) SCC 1 (2006) 145 STC 91] wherein the Supreme Court categorically affirmed the opinion of Sinha, J. and paragraphs 56 and 57 in this regard may be reproduced below:- Para 56: "This view was adopted in Tata Consultancy Services v. State of A.P. for the purposes of levy of sales tax on computer software. It was held: (SCC p. 342, para 81) A goods may be a tangible property or an intangible one. It would become goods provided it has the attributes thereof having regard to (a) its utility; (b) capable of being bought and sold; and (c) capable of being transmitted, transferred, delivered, stored and possessed. If a software whether customised or non-customised satisfies these attributes, the same would be goods. Para 57: This....
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....ods purchased as raw materials in the manufacture of goods may, therefore, take place anywhere and not necessarily inside Delhi and equally the sale of the goods so manufactured may be effected anywhere, whether inside or outside Delhi. The only end-use of the goods purchased required to be made for attracting the applicability of Section 5(2)(a)(ii) is that the goods must but utilised by the purchasing dealer as raw materials in the manufacture of goods and the goods so manufactured must be sold, irrespective whether the manufacture or sale takes place inside Delhi or outside. If the purchasing dealer does not use the goods purchased as raw materials in the manufacture of goods or having manufactured the goods does not sell them, he would commit a breach of the intention expressed by him in the declaration furnished to the selling dealer and the second proviso would immediately be attracted and the price of the goods purchased by him would be liable to be included in his taxable turnover. But so long as he carries out the intention expressed in the declaration and uses the goods purchased as raw materials in the manufacture of goods, whether inside or outside Delhi, and sells the ....