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TMI Blog2010 (7) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent-company was a nonresident registered under the Karnataka Sales Tax Act, 1957 (hereinafter, referred to as "the Act", for brevity), engaged in financing activity against hire-purchase of machinery and also the respondent/assessee was engaged in leasing activities in respect of lease of photo copiers and other machineries. The respondent had claimed exemption from the levy of tax in respect of hire-purchase receipts to an extent of Rs. 9,22,784. It also had claimed exemption from the levy of tax on receipts from leasing of equipment to the extent of Rs. 32,29,368. The assessing authority partly rejected the exemption claimed and enhanced the total taxable turnover at Rs. 1,06,10,618 and Rs. 96,49,673, respectively. The claims of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the assessee executed in favour of M/s. Electrex (India) Ltd., Bangalore. Therefore, the levy of tax under section 5C was deleted and the matter was remanded back to the appellate authority for fresh consideration. Insofar as the lease receipts are concerned, relying on the judgment of the apex court in the case of 20th Century Finance Corpn. Ltd. v. State of Maharashtra [2000] 119 STC 182 (SC) ; [2001] 50 KLJ 245, it was held that, notwithstanding the execution of the relevant agreement at Bangalore the transfer of right to use goods in this case had to be field as having occasioned the inter-State sale of goods and for that reason such trans actions which were to the extent of Rs. 22,68,423 were declared as being exempted from le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sales which occasioned import of goods into India, merely on the premise that goods put to use are located within the State of Karnataka irrespective of the place where the contract or transfer has taken place. This Explanation is in excess of legislative power under entry 54 of List II of the Seventh Schedule. Another important aspect to notice is that the provision of section 5(3) which provides for single point taxation has been omitted in its application to section 5C. Therefore, Explanation 3(d) to section 2(1)(t) of the Act has to be held in excess of legislative power conferred to the State Legislature under entry 54 of List II of the Seventh Schedule to the Constitution following the reasoning given while discussing the Maharash ..... X X X X Extracts X X X X X X X X Extracts X X X X
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