2022 (11) TMI 496 - HC - CST, VAT & Sales Tax
Levy of VAT (Value Added Tax) - lease charges paid by the Railways Department to the Petitioner Company - Deemed sale or not - right to use goods or the use of goods - HELD THAT:- From the authoritative decision of the Hon'ble Supreme Court in 20th Century Finance Corpn. Ltd. [2000 (5) TMI 980 - SUPREME COURT], it is evidently clear that the Hon'ble Supreme Court had in its mandate held that in respect of transfer of right to use any goods, the situs of the sale would be placed where the written agreement transferring the right to use any goods was executed and it is only that State where the written agreement was executed which is empowered to levy tax.
The High Court of Orrisa in M/s Shrei International Finance Ltd. Vs. State of Orissa & Ors. [2008 (3) TMI 638 - ORISSA HIGH COURT] in somewhat identical set of facts has held that since the sale or purchase was in the course inter-state trade and commerce, the State of Orissa has no jurisdiction to levy tax on the lease rent received. The taxable event is the transfer of right to use goods and not the right to use goods or the use of goods. Therefore, the right to use goods or the use of goods is not the relevant factor to justify the levy of tax. Thus, the entire assessment made by the Assessing Officer and the acceptance of the same by the Revisional Authority is per se bad and illegal.
This Court is of the firm view that the Order passed by this Court does not seem to be proper, legal and justified and a strong case for allowing the Review Petition accordingly has been made out - Review Petition is allowed.