TMI Blog2020 (11) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... ipulated under the definition of Information Technology Software are the essential and salient features of an Anti Virus Software also. If that be so, the submissions of the petitioner that an Anti Virus Software is outside the ambit of the definition of an Information Technology Software is not based on any Intelligible Differentia . The petitioner has failed to substantiate that an Anti Virus Software will not fall within the ambit of the definition of Information Technology Software - Since the petitioner is liable to pay service tax but had not discharged the service tax liability, the provisions of Section 68 of the Finance Act, 1994 r/w. Rule 6 of the Service Tax Rules has been violated and therefore, there are no infirmity on the part of the Department, in imposing interest under Section 75(i) along with penalty under Section 76(1) of the Finance Act, 1994. Petition dismissed - decided against petitioner. - W.P.Nos.25923 & 31485 of 2018 and WMP.Nos.30125 & 36693 of 2018 - - - Dated:- 29-10-2020 - HONOURABLE MR. JUSTICE M.S. RAMESH For Petitioner: Mr. N. Viswanathan in both W.Ps. For Respondent : Mr. T.L. Thirumalaisamy, CGSC in W.P.25923/2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the principles laid down by the Madras High Court in ISODA (supra), the petitioner s software is deemed to be a service and therefore the Department was justified in demanding the service tax for the relevant period. 6. The primary issue that arises for consideration in the present cases is as to whether, an Anti Virus Software would fall within the ambit of the definition of Information Technology Software as defined under Section 65 (53a) of the Finance Act, 1994? 7. The Hon ble Division Bench of the Madras High Court in ISODA (supra) has held that when the developer of a software retains his copyright and transfers the network subscriber the right to use the software, by way of an End-User Licence Agreement (EULA), it would only amount as a service . It was also held that though the software are goods, when the goods as such is not transferred but the transaction of right to use as transferred to the end-user, it would only be a service and not a sale . The relevant portion of the order is as follows:- 31. From the above, the dominant intention of the parties would show that the developer or the creator keeps back the copyright of each software, be it canne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be accepted so long as the residuary power is available. However, the question as to whether a transaction would amount to sale or service depends upon the individual transaction and on that ground, the vires of a provision cannot be questioned. 8. The aforesaid findings of the Hon ble Division Bench are self explanatory and therefore, by applying the ratio laid therein, the facility provided by the petitioner by sale of Anti Virus Software to the End-User, is deemed to be a service . 9. In order to overcome the ratio laid down in ISODA (supra), the learned counsel for the petitioner attempted to distinguish the said decision stating that the facts involved therein pertains only to Information Technology Software and that the Anti Virus Software dealt by the petitioner will not fall within the definition of the http://www.judis.nic.in Information Technology Software . To such a reasoning, the learned counsel did not place reliance on any other case laws, but made a reference only to the order of CESTAT, New Delhi in final order No.50022 of 2020 dated 09.01.2020 in the case of Quick Heal Technologies Ltd., V. Commissioner of Service Tax, New Delhi. The decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpilations and exists with the creator or producer in source code or object code forms. They are representation of instructions that include data, sounds and images. 13. The petitioner s Anti Virus Software in CD forms squarely falls within the essential features of the definition of the Information Technology Software . In other words, all essential conditions stipulated under the definition of Information Technology Software are the essential and salient features of an Anti Virus Software also. If that be so, the submissions of the petitioner that an Anti Virus Software is outside the ambit of the definition of an Information Technology Software is not based on any Intelligible Differentia . 14. Though the order of the CESTAT referred to by the learned counsel for the petitioner is not binding on this Court, it would be worthwhile to point out that the finding of the Tribunal that the decision of the ISODA (supra) dealt only with the legislative competence of the parliament and held that software to be goods and further, opined that the ratio of the Hon ble Division Bench was to the effect as to whether a transaction would be a sale or service , would depend ..... X X X X Extracts X X X X X X X X Extracts X X X X
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