TMI Blog2015 (11) TMI 1147X X X X Extracts X X X X X X X X Extracts X X X X ..... would have to be dealt with in the backdrop of the scheme of the Act and the object and purpose sought to be achieved by it. - imposition of a condition of pre-deposit would denote as to how the authorities have prima facie prejudged the issue raised for their consideration. If there is an arguable point and a strong prima facie case, then, other aspects come into play and namely how the rights and equities have to be balanced. They could have been balanced in the given circumstances by not imposing a condition of cash deposit but to provide security and to the satisfaction of the authority. That would ensure, in the event the Petitioner is held liable to pay the tax that, that amount can be recovered by adjusting the security and also by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( MVAT Act for short). The claim of the Petitioner is that it is inter alia engaged in providing network connectivity services to its closed group of customers. The Petitioner does not have any sale or purchase transaction which can be liable to tax during the period in dispute, namely 2006-07. The Petitioner has been granted a Commercial CUG VSAT Service Provider Licence under section 4 of the Indian Telegraph Act, 1885 by the Department of Telecommunications, Government of India vis licence agreement dated 27th February, 2003. That authorises the Petitioner to establish, install, operate and maintain Very Small Aperture Terminal (VSAT) to provide network services via INSAT Satellite System to a closed user group of customers in In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the purview of section 2(24) of the MVAT Act. The assessment was thus finalised and the VAT liability was determined by him vide order dated 29th June, 2013. The Appeal was preferred against such an order to the first appellate authority and Respondent No. 3, who is the first appellate authority, during the course of a hearing on application for stay of recovery of the amount demanded by coercive means, pending the Appeal, directed the Petitioner to deposit a sum of ₹ 2 crores. Aggrieved by such an order passed on 9th January, 2014, the Petitioner preferred an Appeal to the Tribunal and the Tribunal has reduced that sum to ₹ 77,50,000/. Mr. Sridharan appearing for the Petitioner, in response to our usual query, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red payment or other available consideration is thus contemplated. The goods sale of which is effected during supply of service, at best, can be subjected to the Sales Tax. Mr. Sridharan submits that this definition would have to be read together with the definition of the terms 'dealer' and 'business' appearing in sections 2(4) and 2(8). Hence, as long as no element of dealing in goods or transfer of any right in relation thereto is to be found in the activities undertaken by the Petitioner, the taxing provisions would not be attracted and applicable. That is the essential condition and for determining whether the Petitioner can be called upon to pay the tax. Charging provisions of the Act and the incidence of the levy woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order and secondly the Tribunal has reduced the sum from ₹ 2 crores to ₹ 77 lacs. That is not capable of any further deduction, much less complete waiver. That would amount to merely substituting the view of the Tribunal, which is impermissible. Hence, Mr. Sharma submits that the Petition be dismissed. We have noted the rival contentions. We have perused the relevant provisions of the MVAT Act. We have also perused the Petition and the Annexures thereto. In our view, there is substance in the contentions of the Petitioner. The first appellate authority would have to decide as to whether the Petitioner could be subjected to the levy under the MVAT Act. In other words, the applicability of the Act to the business of the Petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me into play and namely how the rights and equities have to be balanced. They could have been balanced in the given circumstances by not imposing a condition of cash deposit but to provide security and to the satisfaction of the authority. That would ensure, in the event the Petitioner is held liable to pay the tax that, that amount can be recovered by adjusting the security and also by initiating every means of payment. At least some amount then is available for recovery. As a result of the above discussion, we are of the opinion that we should not conclude the issue raised and by expressing ourselves in such a manner as would bind the authorities. We only emphasise and highlight the issues raised and which are of considerable importanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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