2018 (8) TMI 2155 - HC - VAT and Sales Tax

Consideration received under franchise agreement - transfer of right to use goods and the trademark under the Delhi Sales Tax Right to Use Goods Act, 2002 and under the Delhi Value Added Tax Act, 2004 or not - HELD THAT - This Court is of the opinion that it would be appropriate to follow the judgment of 17.05.2017 because the issues are identical, however, in the event the final judgment is in any way set aside, modified or clarified by the Supreme Court in the pending proceedings before it, that decision will be binding upon the parties. In other words, if it becomes necessary, in some manner, to give effect to the final order of the Supreme Court by an appropriate modification (to give tax effect) by the Revenue, it shall be at liberty to do so. The writ petition is disposed off.

Summary

Issues involved: Interpretation of franchise agreement under Delhi Sales Tax Right to Use Goods Act, 2002 and Delhi Value Added Tax Act, 2004.

Judgment Summary:

Issue 1:
The Court had previously allowed the assesse's claim regarding the consideration received under a franchise agreement for the transfer of right to use goods and trademark under the relevant tax acts. The government appealed these judgments, leading to subsequent proceedings.

Issue 2:
In a related case, the Court had directed proceedings to be adjourned pending the final outcome of proceedings before the Supreme Court, indicating a need for consistency in decisions.

Issue 3:
The Court decided to follow its previous judgment due to identical issues, but acknowledged that any decision by the Supreme Court would be binding. If necessary, the Revenue would be allowed to modify its actions based on the Supreme Court's final order.

Issue 4:
The writ petition was disposed of in accordance with the previous judgment, with pending applications also being disposed of.

This judgment reaffirms the importance of consistency in legal decisions and the binding nature of higher court rulings on lower courts. It also highlights the need for the Revenue to adjust its actions based on final orders from the Supreme Court.