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2020 (6) TMI 57 - HC - VAT and Sales TaxLevy of VAT - Renting of space - Transfer of Right to use - petitioner is a provider of Passive Infrastructure service for the Mobile Telecommunication Operators (MTO) - whether within the scope of VAT or not - Section 4 of the TNVAT Act, 2006 - scope of the extended definition of sale in Section 2(33)(iv) under the said Act - HELD THAT:- As per the said definition, transfer of right to use “any goods” for any purpose for cash, deferred payment or other valuable consideration is a sale. As per the decision of the Hon’ble Supreme Court in BHARAT SANCHAR NIGAM LTD. (BSNL) VERSUS UNION OF INDIA [2006 (3) TMI 1 - SUPREME COURT], such transfer should be to the exclusion of the owner and others and exclusively in favour of the person in whose favour such transfer of right to use is made. From the facts that has been disclosed in the documents filed before this court, it is evident that there is no exclusive transfer of the temporary shelter or the transmission tower/mast in favour of any one of the Mobile Telecommunication Operators. The space in the shelter and the transmission tower/mast is given on shared basis and charged separately therefore it would not come within the fold of the extended definition of saleSection 2(33) of the TNVAT Act, 2006. Thus, it is evident that wherever extended definition of “sale in Article 366(29-A) are attracted the transaction can be taxed both under the provisions of TNVAT Act, 2006 and under the provisions of Finance Act, 1994. However, it is for Assessing Officers under the respective enactments to determine the value of the two transactions and collect tax - In the present case, no transfer of right to use goods as contemplated under Article 366(29-A) (d) and Section 2(33)(iv) of the TNVAT Act, 2006 is discernable. Even though the temporary shelter and the mast are goods within the means of Article 366(12) and Section 2(21) of TNVAT Act, 2006 yet there is no exclusive transfer to exclusion of others to attract the levy of transfer of “right to use”. The business model is not based on exclusivity. It is on a shared usage basis of the facility viz., passive infrastructure consisting of temporary shelter, Mast, AC, Genset etc. Therefore, there is no “deemed sale” within the meaning of Article 366(29-A)(d) of the Constitution of India and Secion 2(33)(iv) of the Act so as to attract a charge under Section 4 of the TNVAT Act, 2006. Though the passive infrastructure of the petitioner are “goods” within the meaning of Article 366(12) of the Constitution of India and Section 2(21) of the TNVAT Act, 2006 yet there is no “transfer of right to use” within the meaning of extended definition of “sale” under Section 2(33)(iv) TNVAT Act, 2006 and Article 366(29A)(d) of the Constitution of India so as to attract levy under Section 4 of the said Act - thus, no tax is payable by the petitioner. Petition allowed - decided in favor of petitioner.
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