2003 (2) TMI 470 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of taxable turnover for the years 1992-93 and 1993-94 based on charges received for information; Whether charges for conveying information constitute a sale exigible to tax under the Kerala General Sales Tax Act, 1963.

Analysis:
The assessee, a dealer in electronic components and information, reported turnovers for the years 1992-93 and 1993-94. The Additional Sales Tax Officer found charges received for conveying information were not included in the returns, leading to assessments based on higher taxable turnovers. Appeals against these orders were dismissed, arguing the conveyed information constitutes a sale under the Act.

The counsel for the assessee contended that the information conveyed was collected from abroad and provided to customers as printed materials for service charges, not as goods for sale. The Government Pleader argued that the conveyed information qualifies as goods under the Act's definitions, making the transactions taxable.

The Court analyzed the definitions of "sale," "goods," and "taxable turnover" under the Act. The Tribunal considered the conveyed information as valuable goods transferred for consideration, falling within the Act's purview. The Court referenced a prior case involving the sale of SIM cards, establishing that the transfer of valuable property, like the conveyed information, constitutes a sale exigible to tax.

The Court affirmed that the conveyed information constitutes goods, and by transferring this information to customers for consideration, the assessee engaged in a taxable sale. The contention that service charges do not qualify as consideration under the definition of sale was rejected, as the charges were deemed consideration for the transfer of valuable information.

In conclusion, the Court dismissed the revisions, upholding the Tribunal's decision that the charges received for conveying information constituted a sale exigible to tax under the Act. The orders on related petitions were also dismissed, affirming the taxable nature of the transactions.