Equipment rental with location restrictions constitutes VAT-taxable deemed sale despite service tax treatment by assessee

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....The HC dismissed the revenue's appeal in a VAT classification dispute regarding equipment rental services. The assessee hired computers, printers, servers and peripherals to clients under agreements granting legal right to use the goods at specified locations. The court held that despite location restrictions, clients possessed effective control and legal right to use equipment, constituting supply of tangible goods subject to VAT as deemed sale. However, the court ruled against invoking extended limitation period, finding no willful suppression of facts since the assessee maintained service tax registration, filed returns promptly, and paid service tax liability, making the department aware of transaction nature. Consequently, penalty and interest were deemed inapplicable, upholding the tribunal's decision favoring the assessee.....