TMI Blog1992 (4) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... r 1985-86. On 17th March, 1990, it was served with a notice under section 12-A of the said Act. The notice stated that the appellant's assessment for the relevant assessment year had been completed. It had thereafter been found that it had sold the said REP licences. The Commissioner of Commercial Taxes, by his circular dated 30th January, 1990, had clarified that import licences and other similar licences were "goods exigible to tax" under the said Act. Accordingly, the said notice was issued to make taxable the sale price of the said REP licences, in the sum of Rs. 25,97,458.40. The circular referred to in the said notice stated thus: "As per the ratio of the Supreme Court judgment in lottery tickets case*, 'import licences' would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be imported thereby upon production before the customs authority of only a document evidencing the transfer of the REP licence in his name. Since an REP licence commanded a premium, the sales tax authorities wanted, unjustifiably, to include that premium in the sales turnover of the appellant so far as the said REP licences sold during the assessment years under reference were concerned. Our attention was invited to the judgment of the Supreme Court in Swami Motor Transports (P) Ltd. v. Sri Sankaraswamigal Mutt AIR 1963 SC 864. The Supreme Court considered the provisions of the Madras Act 19 of 1955, which amended the Madras City Tenants Protection Act, 1922. It conferred two rights upon a tenant, namely, (i) every tenant on ejectment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sale of lottery tickets within the concerned State. In order to decide this question, the true concepts of goods, sale, movable and immovable property were relevant. The Supreme Court noted that section 2(7) of the Sale of Goods Act defined "goods" as meaning every kind of movable property other than actionable claims. The expression "Movable property" occurring therein had to mean property of every description except immovable property. Since goods were defined to exclude actionable claims, the definition of "actionable claim" in section 3 of the Transfer of Property Act was noted. It runs thus: "'Actionable claim' means a claim to any debt, other than a debt secured by mortgage of immovable property or by hypothecation or pledge o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e which created merely obligations or rights in personam and not with an agreement in the nature of a grant. In the case of the latter type of agreements, i.e., agreements in the nature of grant, the rights or benefits arising thereunder were property, more so when a party thereto had become entitled to the same on performing his part of the contract and in fact such rights or benefits would also be assignable. The Supreme Court noted the arguments on behalf of the lottery dealers that the concept of lottery could be sub-divided into two parts, namely, a right to participate and a right to receive the prize but the two together constituted one single right. The Supreme Court held thus: "It is not possible to accept this contention for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntangible thing like electric energy could be regarded as goods exigible to sales tax. The Supreme Court, therefore, found no reason why the entitlement to a right to participate in a draw, which was a beneficial interest in movable property of incorporeal or intangible character, should not be regarded as "goods" for the purpose of levying sales tax. The conclusion was that lottery tickets to the extent that they comprised the entitlement to participate in the draw were "goods" properly so called, squarely falling within the definition of that expression as given in the Tamil Nadu Act, 1959, and the Bengal Act, 1941, and to that extent they were not actionable claims. In every sale thereof a transfer of property in the goods was involved. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t an inchoate or incomplete right. It cannot be held to materialise in future because its exercise is dependent upon the transferee buying goods covered by the licence and bringing them to Indian shores. Nor can REP licences be held to be actionable claims because the customs authorities might not clear the goods and the transferee would have to commence an action against them in a court of law. In our view, the transfer of an REP licence confers upon the transferee a right which is choate and perfected and exercisable immediately he presents to the customs barrier goods of the nature covered thereby. It must, therefore, follow that REP licences are goods within the meaning of the said Act and the premium or price received by the transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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