TMI Blog1996 (5) TMI 389X X X X Extracts X X X X X X X X Extracts X X X X ..... the Companies Act, 1956, with registered office situated at 15 K.M. Stone, Delhi Road, Hissar, Haryana. Petitioner No. 2 is director of the petitioner No. 1 company and is interested in the well being of the company. The petitioner-company entered into various lease agreements with TATA Finance Limited whereby the said company leased out various plants and machineries. The company raised debit notes dated July 5, 1995, charging the tax amounting to Rs. 26,880 and Rs. 25,792 under the above provision on the rentals in respect of the lease agreement with the said party. The petitioner-company also entered into similar agreements with Gujarat Lease Financing Ltd., Ahmedabad and that party has also raised debit notes charging tax for three months amounting to Rs. 50,343.88 and Rs. 14,865.82. Pal Credit and Capital Limited also leased various plant and machinery purchased by them from Encon Furnances (P) Limited by a similar agreement dated July 23, 1993. It has also raised debit note in respect of the tax for the period from May, 1995 to September, 1995 amounting to Rs. 15,513. 3.. It is alleged that the above lessors had purchased the machineries from other manufacturers who had co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose (whether or not for a specified period), a mortgage, hypothecation, charge or pledge; (vi) a transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration." Section 2(w) defines "taxable turnover", which reads thus: "2(w) 'taxable turnover' in relation to any period means that part of a dealer's turnover for such period which remains after deducting therefrom- (i) the sale price of goods declared tax-free under section 15 or exempted in whole under section 17; (ii) the sale price of goods mentioned in Parts II to VII of Schedule II which are in the nature of tax-paid goods in the hands of such dealer; (iii) the sale price of unginned cotton as specified in Part I of Schedule II and such other goods in the said part as the State Government may from time to time, by notification, specify, sold to a registered dealer who has declared in the prescribed form that the goods are for resale or for use by him in the manufacture of goods for sale by him; (iv) the sale price of goods specified in Part I of Schedule II other than those referred to in sub-clause (iii), sold to a regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made." 5.. Submission of the learned counsel for the petitioners is that the extended meaning given to the definition of word "sale" is ultra vires to entry 54 of List II of VII Schedule of the Constitution and likewise section 9-A of the Act of 1994. The learned counsel has submitted that in fact the petitioners directed the finance company to supply certain goods and goods are purchased by the company and they are leased out directly to the plant and machinery after payment of sales tax or in the course of payment of tax either under the Central Sales Tax Act or under the State Act; and therefore, the goods suffered tax and it cannot be made to suffer a tax twice over. Learned c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e extended definition of the word "sale" as defined under section 2(t) of the Act. 7.. In fact, the decision given in the case of Builders' Association of India [1989] 73 STC 370 (SC); AIR 1989 SC 1371 came up for consideration subsequently in the case of Gannon Dunkerley and Company [1993] 88 STC 204 (SC) and their Lordships have reaffirmed that decision. Their Lordships of the Supreme Court in that context have observed and quoted a passage of decision given in the case of Keshav Mills Co. Ltd. v. Commissioner of Income-tax [1965] 56 ITR 365 (SC) which reads thus: "When this Court decides questions of law, its decisions are, under article 141, binding on all courts within the territory of India, and so, it must be the constant endeavour and concern of this Court to introduce and maintain an element of certainty and continuity in the interpretation of law in the country. Frequent exercise by this Court of its power to review its earlier decisions on the ground that the view pressed before it later appears to the court to be more reasonable, may incidentally tend to make law uncertain and introduce confusion which must be consistently avoided. That is not to say that if on a su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... freezers, cold storage plants, refrigerators, water coolers; (4) Video cassettes, video cassette recorders or video cassette projectors, television sets; (5) Computers; (6) All kinds of furniture, crockery and utensils; (7) Cinematographic and photographic equipments and appliances including cameras, projectors, enlarging lenses; (8) All type of tents including shamiyan and camping equipments; and (9) Motor boats. (2) This notification shall come into force with effect from 1st day of May, 1995." This shows that any plant or machinery, if it is being leased out to any other person for consideration, then the same should be treated to be sale and exigible to tax. In this view of the matter, we do not find any justification in the arguments of the learned counsel for the petitioner that the definition of section 2(t) or section 9-A of the Act of 1994 suffers from any invalidity. Likewise, suffice it to say that Constitution (Forty-sixth Amendment) Act, 1982, having already been held to be valid by their Lordships of the honourable Supreme Court in the case of Builders Association [1989] 73 STC 370; AIR 1989 SC 1371 and reaffirmed in Gannon Dunkerley's case [1993] 88 STC 204, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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