TMI Blog2016 (12) TMI 1702X X X X Extracts X X X X X X X X Extracts X X X X ..... act. In this case as seen from the contract (clause 11), it was agreed that TV films and materials will become the absolute property of the Government with perpetual copyrights, distribution rights etc., only upon delivery of the film. If that be so, the contract can be easily comprehended as having the characteristics of a sale as contemplated under the Sale of Goods Act, 1930. The tribunal erred in construing the contract as a contract of service - the order of tribunal set aside and the order of the assessing authority restored. - S.T.Rev.No.224 of 2008 - - - Dated:- 21-12-2016 - P.N.Ravindran and A.Muhamed Mustaque, JJ. C. K. Govindan, Senior Government Pleader, for the petitioner Kuryan Thomas, Anil D. Nair, P. Benny Thomas, K. John Mathai and E. K. Nandakumar for the respondent ORDER The State in this revision questions the order of the Kerala Sales Tax Appellate Tribunal wherein it was found that the transaction between the assessee and Doordarshan in respect of 13 episodes of television serial entitled Mohapashikal was not a sale and it was only a contract for work. 2. The turnover of the assessee, Malayala Manorama Co.Ltd., for the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which can be transmitted, transferred, delivered, stored, possessed, etc. The software programs have all these attributes. The answer to the question involved in this case would depend upon answering the point whether the agreement is a mere contract for work and labour or contract for sale of goods. 5. The agreement was entered on 4.3.1994 between the assessee and Doordarshan. By the said agreement, the assessee was directed to produce a 13 episode serial entitled Mohapashikal . The assessee had to carryout the entire production work. It was agreed that the assessee will have to write the script, shoot, direct, produce, edit and complete the serial in all respects. Thus, the entire creation of the work was rested on the assessee. It was reserved in the agreement that the approving authority (Doordarshan) will have full authority and liberty to reject any or all of the materials or workmanship. It was also agreed that the Government will not be liable to pay any amount to the assessee towards expenses incurred or service rendered in the event the approving authority is dissatisfied with the making of the serial. It is further agreed that upon delivery of the serial and mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and not the form of the contract is material in determining the nature of transaction In Bharat Sanchar Nigam Ltd. and another vs. Union of India and others [(2006) 3 SCC 1] , it was held by the Hon'ble Supreme Court, in a case where a transaction for providing telecom service was involved, that a telephone service is nothing but a service and a transaction involving telephone service as well as providing an apparatus may involve a composite contract of service and sale. 8. In the case in hand, the assessee had to write the script, shoot and produce the serial which means the production of serial itself was to be done by the assessee. Undoubtedly the principal object of the work undertaken by the assessee is the production of a cinemautograph film in a material form. If the skill and labour in making the film cannot be separated from the material object in which it exists the contract will have to be construed as a contract for sale and not as a contract of work and labour. In Assistant Sales Tax Officers and others vs. B.C.Kame [Manu/SC/0421/1976] the Hon'ble Supreme Court held that ...Where the principal object of work undertaken by the payee of the price ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particular facts and circumstances of this case. It seems the concept of ownership and intellectual property rights are often conflated and blurred, the boundary distinguishing it is not free from doubt. The ownership is traditionally understood as a legal relationship between a person and a thing over tangible and corporeal property. Blackstone describes it as a sole and despotic dominion which one man claims and exercises over the external things of the world, in total exclusion of the right of any other individual in this universe (see Commentaries on the laws of England of Sir William Blackstone Vol II of the Rights of things) . Due to rapid growth of trade and industry, the original definition of ownership has undergone various changes. It is now rather understood as a bundle of rights and each of such rights can be separated from other rights. It is possible for an owner to retain some ownership associated with the property and transfer other rights. Intellectual property rights on the other hand represent monopoly of intellectual creation of the owner of such rights. It is more understood as conceptional rights on intangible and incorporeal properties. Ownership rights can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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