2020 (8) TMI 687 - HC - VAT and Sales Tax

Taxability - Exemption on the sale of REP licence - Goods or not - HELD THAT - The Honourable Supreme Court in its detailed judgment, in the case of Yasha Overseas vs Commissioner of Sales Tax and others 2008 (5) TMI 43 - SUPREME COURT , while discussing various precedents on the issue, held that both REP license and DEPB license amounted to 'goods' and therefore sales thereon, was taxable under the Sales Tax Law of the State. There are no merits in the present petition - petition dismissed.

Summary

Issues:
1. Claim of exemption on the sale of REP license.
2. Interpretation of whether REP license amounts to 'goods' for taxation purposes.
3. Applicability of previous legal judgments on the taxation of REP licenses.
4. Distinction between REP license and DEPB for taxation purposes.

Analysis:
1. The petitioner, an assessee, claimed exemption on the sale of a REP license, arguing that it did not fall under the definition of 'goods' and should not be taxable. The contention was based on the absence of proof to allow the exemption, as per the decision of the Honourable Supreme Court in a specific case.

2. The Honourable Supreme Court, in a detailed judgment, established that both REP license and DEPB license are considered 'goods' for taxation purposes under the Sales Tax Law. The Court emphasized that REP licenses had intrinsic value and were freely bought and sold in the market, making them market commodities. The Court clarified that the decision in a previous case did not alter the position regarding the classification of REP licenses as goods.

3. The judgment highlighted that the legal position concerning the sale of REP licenses was conclusively determined by the decision in a specific case, affirming that REP licenses were not actionable claims but goods. The Court differentiated between market commodities like REP licenses and other transferable claims that were not considered goods due to their lack of inherent value and marketability.

4. The Court addressed the distinction between REP licenses and DEPB, emphasizing that the legal principles established for REP licenses also applied to DEPB. The judgment analyzed the similarities between the statutory provisions governing REP licenses and DEPB to determine the applicability of the legal precedent in both cases.

In conclusion, considering the settled legal position that REP licenses are classified as goods for taxation purposes, the High Court dismissed the writ petition filed by the assessee, finding no merit in the claim for exemption on the sale of REP licenses.