TaxTMI 
TaxTMI 
2023 (7) TMI 1234
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....r passed by the Kerala Sales Tax Appellate Tribunal, Ernakulam, in T.A.Nos.13 to 18 of 2014. The common order was passed in six appeals, three of which pertain to assessments for the assessment years 2002-03, 2003-04 and 2004-05 respectively, and the other three of which pertain to penalties imposed on the respondent/assessee for the said years. The Tribunal, by the impugned order, allowed the appeals preferred by the assessee against the assessment orders as also the orders imposing penalty, and it is aggrieved by the same that the State is in revision before us through these S.T.Revisions. 2. The respondent/assessee was doing business in software. During the relevant period, computer software attracted tax @ 4% ad valorem in terms of Ent....
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....st Appellate Authority, did not meet with any degree of success since the First Appellate Authority confirmed the assessments made against the respondent/assessee. The respondent/assessee therefore preferred second appeals before the Appellate Tribunal, which separately considered the appeals filed against the assessments and penalty proceedings and confirmed the findings of the First Appellate Authority and dismissed the appeals preferred by the respondent/assessee. Aggrieved by the said order of the Tribunal, the respondent/assessee approached this Court through revision petitions against the orders passed by the Tribunal in the penalty matters as also the assessment matters. The High Court, on that occasion, allowed the revision petition....
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.... against the assessee and S.T.Rev.Nos.2, 5 and 8 of 2016 pertain to the penalty imposed on the assessee. At the very outset, we find that inasmuch as the very issue of taxability of customised software under the KGST Act was in a state of flux as, during the relevant time, there was ambiguity that prevailed in the trade as to whether it was service tax or sales tax that would be payable on the supply of customised software to clients, and further on account of the several rounds of litigation that ensued whereby the adjudicating authorities including the Appellate Tribunal found in favour of the assessee there is sufficient cause for deleting the penalty imposed on the assessee in the instant cases. As is well settled, penalty under a taxin....
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....s 27, 78 and 81 of the judgment, where it is stated as follows: "27. In our view, the term "goods" as used in Article 366 (12) of the Constitution of India and as defined under the said Act is very wide and includes all types of movable properties, whether those properties be tangible or intangible. We are in complete agreement with the observations made by this Court in Associated Cement Companies Ltd. (supra). A software program may consist of various commands which enable the computer to perform a designated task. The copyright in that program may remain with the originator of the program. But the moment copies are made and marketed, it becomes goods, which are susceptible to sales tax. Even intellectual property, once it is put on to a....
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....arketable commodity. They are visible to senses. They may be a medium through which the intellectual property is transferred but for the purpose of determining the question as regard leviability of the tax under a fiscal statute, it may not make a difference. A program containing instructions in computer language is subject matter of a licence. It has its value to the buyer. It is useful to the person who intends to use the hardware, viz., the computer in an effective manner so as to enable him to obtain the desired results. It indisputably becomes an object of trade and commerce. These mediums containing the intellectual property are not only easily available in the market for a price but are circulated as a commodity in the market. Only b....