TMI Blog2005 (8) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 364 and 365 of 1994-95, dated February 25, 1995 and further has modified the orders passed by the assessing authority under section 12A of the Karnataka Sales Tax Act, 1957, dated January 12, 1995 and December 21, 1994 for the assessment years 1990-1991 and 1989-1990, respectively, to the extent of recomputing the turnover after allowing 10 per cent of the total contract receipts as deductions under rule 6 of the Karnataka Sales Tax Rules, 1957. The facts in brief are: The assessee is a dealer registered both under the provisions of the Karnataka Sales Tax Act, 1957 ( the KST Act, for short) and the Central Sales Tax Act, 1956 ( the CST Act, for short) and is engaged in the business of supply and development of computer software. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellate authority and further, has restored the reassessment orders passed by the assessing authority. It is the correctness or otherwise of the said order is called in question in this appeal by the assessee, being aggrieved by the same. The question of law raised in the memorandum of appeal for our consideration and decision is as under: Whether, on the facts and circumstances of the case, the software consultancy charges were taxable under entry 22 of the Sixth Schedule to the KST Act? The learned senior counsel Sri Sarangan for the assessee contends that programming and developing of software to the requirement of a customer would not involve transfer of property in goods and therefore, both the assessing authority and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessee. In our view, it would be suffice to observe only the charging provision under the KST Act, the relevant entry, the facts and the legal issues involved in Tata Consultancy Services case [2004] 137 STC 620 (SC); AIR 2005 SC 371; [2005] 1 SCC 308. Section 5B of the Act provides for levy of tax on the taxable turnover of transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract as mentioned in column (2) of the Sixth Schedule to the Act at the rates specified in column (3) of the said Schedule. Entry 22 of the Sixth Schedule to the Act speaks of programming and providing computer software and the rate of tax during the relevant assessment year was at six per cent. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessable to sales tax under the Andhra Pradesh General Sales Tax Act, 1957? The apex court while answering the question, after making reference to the decision of the apex court of Associated Cement Companies Ltd.'s case [2001] 124 STC 59 (SC); AIR 2001 SC 862; [2001] 4 SCC 593, on which reliance was also placed by learned senior counsel Sri Sarangan before us has observed: The term 'goods' as used in article 366(12) of the Constitution of India and as defined under the said Act is very wide and includes all types of movable properties, whether those properties be tangible or intangible. A software programme may consist of various commands which enable the computer to perform a designated task. The copyright in that progra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... software is goods. In both cases, the software is capable of being abstracted, consumed and use. In both cases the software can be transmitted, transferred, delivered, stored, possessed, etc. Thus even unbranded software, when it is marketed/sold, may be goods. However, the Supreme Court declined to express opinion thereon because in case of unbranded software other questions like situs of contract of sale and/or whether the contract is a service contract may arise. In the instant case, the revisional authority after scrutinising the books of account maintained by the dealer in its regular course of business, xerox copies of the invoices issued by the assessee to its customers and also the profit and loss account filed for the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar ending March 31, 1990 clearly indicates income received from software development at Rs. 34,20,789.36. In addition to this, the assessing authority has given a clear finding in the order passed under section 12A on January 12, 1995 for the year 1990-91 that, on verification of records, it is seen that the software development charges have been received in the guise of consultancy charges. Under the facts and circumstances as explained above, it is evident that the dealer has undertaken work of software development programmes, or other related works in connection with the development of software programming to their customers. In view of the aforesaid factual finding of the revisional authority, which is again based on the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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