TMI Blog2017 (1) TMI 911X X X X Extracts X X X X X X X X Extracts X X X X ..... of the deposit of the amount of ₹ 50 crores, observed that let the Assessing Officer proceed with the assessment proceedings, but restrained recovery till further orders - appellant contended that in view of the aforesaid order of the Apex Court, no recovery whatsoever can be made by the State authorities even if the assessment is completed for the subsequent period may be after 2008 to 2010 and even from 2010 to 2016. Held that: - It is hardly required to be stated that in an intra- Court appeal, the judicial scrutiny would be available if the learned Single Judge has committed ex facie error or has exercised discretion in a perverse manner. If the learned Single Judge has taken one possible view when two views are possible, it may not be a case for interference. As such, if the matter is examined in light of the same, the learned Single Judge has exercised discretion by granting interim protection upon condition to deposit 50% of the tax amount which could be approximately around ₹ 336 crores, since in any case, the protection is already granted for the interest and the penalty. As such, in our view, it cannot be said that the discretion has been exercised by the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neously. 2. All the appeals arise from the common order passed by the learned Single Judge dated 20.09.2016 in the respective writ petitions, so far as it relates to not granting the interim stay against the recovery of the amount of tax assessed by the respondents-authorities for the period from August 2008 to March 2014. 3. We have heard Mr.G.Shivadass, learned Counsel appearing for the appellant in all the appeals and Mr.T.K.Vedamurthy, learned AGA has appeared for the respondents-State, the main contesting party, upon advance copy in all the appeals. 4. The contention raised on behalf of the appellant was that when the assessment was made by the respondents-authorities for the period from April 2005 to July 2008 (hereinafter referred to as the period from 2005-2008 for the sake of convenience), the appellant had challenged the said assessment for recovery of the tax, interest and the penalty. The learned Single Judge dismissed the petitions on the ground of alternative remedy. However, in the writ appeals before the Division Bench of this Court, the Division Bench upheld the levy of tax as per its decision dated 06.02.2010. The matters were carried before the Apex Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he mouth of the appellant to contend that the interim protection granted by the Apex Court would continue for indefinite period, more particularly, when the Apex Court had already observed earlier that the effect has to be given prospectively vide order dated 12.03.2010. He submitted that even if it is considered that the Apex Court permitted the assessment proceedings to continue, such would be until the Apex Court passed the subsequent order dated 03.05.2010 and it cannot be for any period thereafter. Therefore, he submitted that the interpretation as sought to be canvassed by the learned Counsel for the appellant is not correct and may not be accepted by this Court. He also contended that when the Division Bench of this Court has already maintained the levy of tax and the Apex Court has not stayed the order of the Division Bench of this Court, as on today the tax is leviable. The learned Single Judge by exercising the discretion, has granted protection with condition to deposit 50% of the amount which may not be interfered with by this Court, in an intra Court appeal. Therefore it was submitted that this Court may dismiss the appeals. 7. We may at the outset record that follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction of transfer of right to use the goods cannot be termed as contract of paramount as it is deemed sale within the meaning of legal fiction as enumerated under Article 366(29A) (d) of the Constitution. The taxable event on the transfer of right to use any goods is on the transfer which results in right to use and the situs of sale would be the place where the contract is executed and not where the goods are located for use. 74. Keeping in view the above dictum and the fiction which has been created in Section 6 of the KVAT Act and the facts of the present case, since the agreement has been entered into within the State of Karnataka and at the time of agreement, i.e., transfer of right to use the goods was concluded, in the instant case, the goods namely, space segment capacity of the transponder in a satellite was available for transfer of right, Section 6 of the Act does not hit the transaction in question. We reiterate that, the said provision enables different varieties of transaction to be brought within the scope of the KVAT Act and in our view, the same cannot curtail the present transaction from being brought within the purview of the KVAT Act. Accordingly, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crores including that the assessee is the corporate wing of the Central Government. The Apex Court further observed that as the substantial amount is deposited by the assessee, let the Assessing Officer proceed with the assessment proceedings but no recovery will be made till further orders. The aforesaid shows that one of the possible interpretation is that since the subject of the appeal was for the demand of tax from 2005-2008 for the period after July 2008, the assessment was yet to be made and hence such observations were made. The another possible interpretation is that since earlier the Apex Court observed for making prospective effect on 12.03.2010 and the assessment was yet to be undertaken for the period after July 2008 till 12.03.2010 and in any case after 12.03.2010 till 03.05.2010, same was permitted with the observation that no recovery will be made till further order, but would relate to the period upto 03.05.2010. v) There was no subject under consideration before the Apex Court in the aforesaid SLP or when I.As were considered for the assessment of the period after 03.05.2010. By the impugned assessment, the demand of VAT is made of ₹ 673,92,11,963/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Apex Court considered the matter on 12.3.2010 and thereafter, upto 3.5.2010, since the period after July 2008 had elapsed and the assessment proceedings were to be undertaken from July 2008 until 3.5.2010, the order of the Apex Court can be interpreted to mean that such assessment for the aforesaid period was to be proceeded with but the recovery was not to be made. As observed earlier, the amount of tax for that respective period after July 2008 to March 2010 is only for ₹ 130 Crores out of the total of ₹ 674 Crores. 11. As such, it is not possible to accept the contention raised by the learned Counsel for the appellant that the order of the Apex Court covers for indefinite period, i.e. for all the period after 3.5.2010 and no recovery is to be made of the amount of tax and to that extent, the observations made by the learned Single Judge cannot be said to be erroneous since the question for the period after 3.5.2010 and its assessment thereof did not arise for consideration before the Apex Court. We however make it clear that in any case, ultimately, since the matter may fall in the arena of interpretation of the order of the Apex Court, the Apex Court itself will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or the view taken by the Division Bench of this Court. On the contrary, at one point of time, the Apex Court directed the appellant to implement the judgment for future period. Under these circumstances, we cannot accept the said contention of the learned Counsel for the appellant. 15. In view of the above, we do not find any case made out for interference to the order passed by the learned Single Judge so far as it relates to grant of interim protection on condition to deposit 50% of the tax amount. However, we make it clear that our observations in the present order shall not prejudice rights of the parties to approach the Apex Court for appropriate modification and/or clarification of the order of the Apex Court in the pending S.L.P. and if any clarification or modification is so made by the Apex Court, the right of the parties shall stand governed accordingly. 16. We may also make it clear that our observations made in the present order are only for the purpose of interim order passed by the learned Single Judge and both sides shall be at liberty to raise all contentions available in law and the matter shall be examined by the learned Single Judge independently, without ..... X X X X Extracts X X X X X X X X Extracts X X X X
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