9911796707
TMI Blog1990 (2) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... said materials belong to the decorators and at no point of time there is any transfer of property by the decorator in favour of the customer. After the expiry of the specified period, the pandals, barricades, rostrums or pavilions are dismantled by the decorators with their own men and labour and the materials are taken back to the godown of the applicant for subsequent use according to orders. The customers are never given the right to use the materials in any manner they like. The decorators are paid only the service charges for constructing and/or raising or erecting such pandals, etc., and no consideration is paid by the customers for the materials supplied and brought by the decorators for such construction. The pandals, etc., as constructed by the decorators, are attached to the earth and as such, they form part of the immovable property. 3.. After the Forty-sixth Amendment of the Constitution, the State Legislature has substituted the definition of "sale" to mean any transfer of property, in goods for cash or deferred payment or other valuable consideration and includes any transfer of the right to use any goods for any purpose whether or not for a specified period. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raise this issue during hearing of the case before us. 6.. The case of the respondents in brief is that in view of the amended definition of "sale", the work done by the applicant becomes exigible to tax. The further submissions made by the respondents in opposing the applicant will appear in course of our judgment to follow. 7.. The main point for consideration in this case is whether the erection of pandals, pavilions, rostrums, etc., come within the meaning of "sale", as now defined. The expression "sale". after the Forty-sixth Amendment of the Constitution, as defined in sub-clause (ii) of section 2(g) of the Bengal Finance (Sales Tax) Act, 1941, reads as follows: "(ii) any transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration, or..." The first contention urged by Dr. Pal, is that the pandals or rostrums constructed by decorators being fixtures attached to the earth, become a part of immovable property and cannot, therefore, come within the meaning of goods as contemplated by the Bengal Finance (Sales Tax) Act, 1941. The expression "immovable property", as defined in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pandals, etc., is really in the nature of a service of a complex character not really involving a transfer of the materials even for a limited period. In support of the contention, reliance was placed in the case of Bank of India v. Commercial Tax Officer, reported in [1987] 67 STC 199 (Cal). That was a case relating to lease of bank lockers. After the amendment of the definition of "sale", the department issued notices to a number of banks for the purpose of levying tax on the transfer of the right to use the bank lockers which amounted to sale. The banks filed writ petitions challenging the notices and contending that the facility granted to the customers of the bank was not a sale. The fact situation of that case, however, is different. A bank locker leased out to a customer stands on a different footing from a pandal or a rostrum erected by a decorator under orders of the customer. In that case it was held that the bank had built a strong room, installed a steel cabinet with safety lockers with double locking system; access to the lockers is checked and controlled by the bank authorities and constant guard is provided over the property. The locker cannot be opened by the cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erent articles to the customer and the customer erects the pandal with his own men and labour. In such a situation it might be possible to say, if at all, that the letting value of the materials should be taken into consideration for the purpose of assessing sales tax liability. But it is nobody's case that such is the practice prevailing in the trade. The decorators themselves erect the pandals for a consideration and after the specified period dismantle the same and remove the articles to their own godown. Such being the case, we are unable to accept the contention of the respondents that pandals erected by decorators come within the meaning of "sale of goods". 10.. Dr. Pal, also, drew our attention to the statement of objects and reasons for introducing the Constitution (Forty-sixth Amendment) Bill, 1981. In particular, he drew our attention to item 6 of the statement which reads as follows: "6. Device by way of lease of films has also been resulting in avoidance of sales tax. The main right in regard to a film relates to its exploitation and after exploitation for a certain period of time, in most cases, the film ceases to have any value. It is, therefore, seen that instead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry to come to a positive finding whether a pandal qua pandal is "goods" or not. But, we find that the hiring of pandals erected by decorators at the instance of customers for a specified period, cannot come within the meaning of "sale" so as to be exigible to sales tax. The argument that the letting value of the different materials with which pandals are erected are "goods" in our view, makes no difference because it is not the materials that are transferred for use by the customers as such. It is the totality of the service rendered by the decorator, namely, the erection of pandals, etc., that falls for our consideration. We, however, make it clear that the various other items which decorators in course of their trade let out to their customers, such as, tables, chairs, etc., are "goods" within the meaning of the Act and they may come within the definition of "sale" as amended. 12.. In the circumstances, the application succeeds in part. A writ in the nature of prohibition be issued commanding the respondents to forbear from giving any effect to and/or taking any steps in pursuance of the notice dated 5th November, 1985, issued by the respondent No. 4 under section 14(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
