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2021 (3) TMI 192 - HC - VAT and Sales TaxMaintainability of petition - Validity of assessment order - transfer of right to use of goods - whether the petitioner should be relegated at this distant point of time to avail the alternate remedy before the Appellate Authority under the respective enactment or whether these writ petitions can be disposed on merits as there are no disputed questions of fact involved? - HELD THAT:- Since there are no disputed questions of fact and only application of settled position of law to the facts of the case, I am inclined to exercise the jurisdiction of the court under article 226 of the Constitution of India. Further, clarity on the law is available as on this date in the light of the decision of the Hon'ble Supreme Court in BHARAT SANCHAR NIGAM LTD. (BSNL) VERSUS UNION OF INDIA [2006 (3) TMI 1 - SUPREME COURT]. The said decision was not available when the impugned orders were passed. Article 366(29A) of the Constitution of India was amended by the 46th Amendment to the Constitution to bring transactions where one or more of the essential ingredients of a sale as defined in the Sale of Goods Act, 1930 were absent, within the ambit of the definition of purchase and sales for the purposes of levy of sales tax. The amendment especially allowed specific composite contracts viz. works contracts [Clause (b)], hire purchase contracts [Clause (c)], catering contracts [Clause (e)] by legal fiction to be divisible contracts where the sale element could be isolated and be subjected to sales tax. In the facts and circumstances of the present case, the above test enunciated for “transfer of right to use” is not satisfied. Therefore, the petitioner cannot be subjected to tax under the provisions of the Tamil Nadu General Sales Tax Act, 1959 and/or under the provisions of the Central Sales Tax Act, 1956. In the transactions entered between the petitioner and the banks, the effective control over to ATM's continued to vest with the petitioner. Since the issue stands fully covered in favour of the petitioner in the above cited decision of the Hon'ble Supreme Court in BHARAT SANCHAR NIGAM LTD. (BSNL) VERSUS UNION OF INDIA [2006 (3) TMI 1 - SUPREME COURT], these writ petitions deserve to be allowed by quashing the impugned orders. As a matter of fact, the subject transaction may have been liable to tax under Section 65(105)(zzzzj) of the Finance Act, 1994 with effect from 2008 after service tax was levied on “Supply of Tangible Goods” as about test for “transfer of right to use” is conspicuously absent - Petition allowed - decided in favor of petitioner.
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