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2014 (1) TMI 1004 - AT - VAT and Sales TaxLevy of VAT on Transfer of right to use ATM - Penalty U/s 51 (7) (b) of the Punjab Value Added Tax Act, 2005 - Registered dealer under the Act, 2005 - Held that - The appellant procures ATM Machines and the related equipments in compliance of the service agreement between the appellant and the Banks, to be installed, operated and deployed at various locations in Punjab, whereby the possession, control, management, operation and the property in goods throughout remains with the appellant as is clear from the terms of agreement. The appellant is compensated for deployment of ATMs and their management by a transaction fee to be paid every time by a customer of the bank on availing the facility of ATMs successfully - accessibility to the ATM being provided to the bank customer did not put the customer in possession of ATM or any part thereof and the element of sales is not involved - Decided in favor of assessee.
Issues:
Appeal against penalty order under Punjab Value Added Tax Act, 2005. Analysis: The appeal was directed against the penalty order imposed under Section 51 (7) (b) of the Punjab Value Added Tax Act, 2005. The goods, while being transported from Delhi to Ludhiana, were detained at the Information Collection Centre (ICC) in Shambu (Import) as the consignee dealer was not a registered dealer under the Act. The penalty was imposed after an enquiry by the Assistant Excise and Taxation Commissioner-cum-Designated Officer. The appellant argued that the goods were imported with proper documents and no violations occurred. It was contended that providing ATM machines to banks did not constitute a sale as per the Act and therefore, the appellant was not liable for registration under the Act. The appellant further argued that the possession, control, and management of the ATM machines remained with them as per the service agreement with the banks. The transaction fee received for deploying ATMs did not amount to a sale as ruled in a previous case by the Tribunal. The State Counsel, however, supported the penalty order without distinguishing the previous case cited by the appellant. After considering the arguments presented, the Tribunal found that the issue was squarely covered by a previous decision in Transactions Solutions International (India) Pvt. Ltd., New Delhi. Consequently, the appeal was accepted, and the orders passed by the lower authorities were set aside as being legally flawed. In conclusion, the Tribunal ruled in favor of the appellant, citing the precedent set by a previous judgment. The decision highlighted that the provision of ATM services to banks did not constitute a sale under the Punjab Value Added Tax Act, 2005. The orders imposing the penalty were deemed legally incorrect and were overturned by the Tribunal.
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