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2016 (11) TMI 550 - HC - VAT and Sales TaxJurisdiction of AO - levy of tax under U.P. VAT Act, 2008 on Royalty - palace of execution of contract - franchise service u/s 65(105)(zze) of Finance Act, 1994 - Reverse charge mechanism - whether the stand of the petitioner that notice is without jurisdiction since agreement between petitioner and JFL was executed outside India, therefore, AO has no jurisdiction to levy tax on transaction executed outside India is justified? Held that: - There is no averment regarding mode of communication adopted by petitioner communicating its acceptance. There is not even a whisper as to how and in what manner communication of acceptance was made. In absence of any specific pleading so as to attract exceptions with regard to communication, we have no option but to hold that acceptance will be completed only when it is communicated to offeror and that communication obviously would be at a place wherefrom offer was made. That be so, the agreement can be said to become a concluded contract and executed when it is communicated to Proposer/ Offeror at NOIDA wherefrom offer was made. The ultimate result would be that the very foundation of argument that taxing authorities in Uttar Pradesh had no jurisdiction, disappears and vanishes. It cannot thus be said that impugned orders are patently without jurisdiction - Quantum of assessment made by Assessing Officer is not under challenge. Assessment was challenged before us only on the ground of jurisdiction, i.e., transfer of right to use goods came into effect outside India and, therefore, taxing authorities in State of U.P. have no jurisdiction to demand any tax, which question we have already answered against petitioner. We, therefore, leave it open to petitioner that if there is any dispute with regard to quantum of assessment made by Assessing Officer, same being a question of fact, it will be open to petitioner to raise such dispute by filing appeal under the statute. Jurisdiction of AO not questionable and is justified - petition dismissed - decided against petitioner.
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