TMI Blog2015 (3) TMI 259X X X X Extracts X X X X X X X X Extracts X X X X ..... of Maharashtra, AIR 2000 SC 2436. After addressing entire history of certain amendments in the constitution, as also State Legislation in respect of sale or purchase of goods, the Court observed that, by virtue of entry 92-A, List 1, Seventh Schedule of the Constitution, the Parliament has power to legislate in regard to taxes on sales or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce. Article 269 provides for levy and collection of such taxes. Vide Article 286 (1) of the Constitution, the State legislature is precluded to make law imposing tax on the transactions of transfer of right to use any goods where such deemed sales takes place (a) outside the State and (b) in the course of import of goods into the territory of India. There are some other limitations on the taxing power of the State legislature by Article 286(3) of the Constitution. In respect to inter-State trade or commerce the situs of sale or purchase is wholly immaterial. The State legislature cannot by law, treat sales outside the State and sales in the course of import as 'sales' within the State by fixing the situs of sales within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned the tax liability to ₹ 109167.40 vide order dated 18.03.2002. 3. The dealer preferred Appeal No. of 2002 which was dismissed by Joint Commissioner (Appeal) II, Trade Tax, kanpur vide order dated 27.08.2003. Aggrieved thereto, it preferred Second Appeal No.476 of 2003 before Trade Tax Tribunal, Kanpur Bench, First Kanpur (for short Tribunal ). The Tribunal has allowed appeal vide order dated 09.12.2004, hence Revenue has come in this revision. 4. The question is whether transaction in question of dealer is taxable under Section 3F or the dealer is entitled to exemption under Section 3F(2)(B)(1) of Act, 1956. 5. Before considering the aforesaid question, it would be appropriate to consider certain provisions including Section 3F of Act, 1956. 6. The term goods as defined under Section 2(d) of Act, 1948 reads as under : (d) 'Goods' means every kind or class of movable property and includes all materials, commodities and articles involved in the execution of a works contract, and growing crops, grass, trees and things attached to, or fastened to anything permanently attached to the earth which, under the contract of sale, are agreed to be severed but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts; (p) lessee means any person to whom the right to use any goods for any purpose is transferred under a lease; (q) lessor means any person by whom the right to use any goods for any purpose is transferred under a lease. 11. Then Section 3-F deals with the tax on the right to use any goods involved in the execution of its contract. Sub-section (1) and 2(a) of Section 3-F which are relevant in this case are reproduced as under: 3-F. Tax on the right to use any goods or goods involved in the execution of works contract-(1) Nothwithstanding anything contained in Section 3-A or Section 3-AAA or Section 3-D but subject to the provisions of Sections 14 and 15 of the Central Sales Tax Act, 1056, every dealer shall, for each assessment year, pay a tax on the net turnover of- (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' or (b) transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract. at such rate not exceeding twenty percent as the State Government may, by notification, declare and differen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 286(3) of the Constitution. In respect to inter-State trade or commerce the situs of sale or purchase is wholly immaterial. The State legislature cannot by law, treat sales outside the State and sales in the course of import as 'sales' within the State by fixing the situs of sales within its State in the definition of 'sale' as it is within the exclusive domain of Parliament to fix the location of sale by creating legal fiction or otherwise. The situs of sale can only be fixed by the appropriate legislature. 13. There can be various principles to determine situs of sale. Certain views expressed in some earlier judgments of Apex Court are noticed in 20th Century finance Corporation Ltd. (Supra) and they are (1) where the goods are delivered for consumption, (2) where the contract is concluded, (3) where the goods are sold or delivered, and (4) where the essential ingredients which complete a sale, are found in majority. 14. The Court held, where the situs of sale has been provided by legal fiction created by State Legislature, there is no difficulty. However, in the Act 1956 since Parliament has not fixed location of sale in case of transfer of right to use, b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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