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2023 (8) TMI 255 - HC - VAT and Sales TaxLevy of VAT - ATM Management Services provided by the petitioner to various Banks across the State of Karnataka on which the petitioner has already paid Service Tax - Karnataka Value Added Tax Act, 2005 (KVAT Act) - HELD THAT:- The impugned orders, levies and demands are illegal, arbitrary and without jurisdiction or authority of law and the same deserve to be quashed. The undisputed material on record, in particular the agreements also make it unmistakeably clear that it is nowhere evident that the ATMs and equipment at any stage are transferred/delivered to the banks and neither does the possession get transferred to the bank. The petitioners all through out the tenure of the agreement continues to provide ATM Management services to the banks deploying/using the ATMs and equipment. Delivery/transfer is sine qua non to attract levy of VAT. However, no delivery but only deployment takes places. The petitioners not only has the possession but is also in effective control of the ATMs and equipment. If it was neither in possession or in effective control over the ATMs and equipment, the petitioners would have been unable to provide the aforesaid services. The impugned orders have erroneously held the petitioners transaction to be one of deemed sale. A deemed sale or delivery on hire purchase would arise only when goods are either delivered physically or on the grant of effective control and possession therein to the recipient. In the present case, the transaction is a pure service transaction not entailing any transfer of property of goods or effective control of the goods to the recipient. The various terms of the Agreements with the Banks discloses that the only intent of the contract is only provision of ATM management service for which the petitioners deploys ATMs and other assets at various sites across India. The petitioners uses the ATMs and other assets merely as a means for providing ATM management services to banks. The levies and demands are illegal, arbitrary and without jurisdiction or authority of law and the same deserve to be quashed - petition allowed.
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