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TMI Blog2006 (9) TMI 520X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 61(2)(e) of the HVAT Act to the effect that tax is to be charged on sale or purchase thereof was beyond the legislative competence under entry 54, List II of the Seventh Schedule to the Constitution of India. Impugned amendment is extracted below: "2. In the Explanation to clause (d) of sub-section (2) of section 61 of the Haryana Value Added Tax Act, 2003,-- (i) for sign '.' existing at the end, the sign ';' shall be substituted; and (ii) after clause (d), the following clauses shall be added at the end, namely:-- '(e) the tax chargeable under the Act of 1973 on the sale or purchase of duty entitlement pass book, effected on or before March 31, 2003, shall be calculated at the rate of four per cent of the turnover of sale or purchase of such goods, as the case may be, and shall be paid voluntarily without payment of interest on or before March 31, 2004, whereafter interest at the rate of eighteen per cent per annum on the amount of tax due for the period of delay shall be charged: Provided that where a dealer has charged tax at a rate more than four per cent, the tax shall be calculated and payable at such rate; . . .' ." While defen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce/exim scrip is neither a chose-in-action nor an actionable claim. It is also not in the nature of a title-deed. It is by itself a property. For all intents and purposes, REP licences/exim scrips are goods leviable to tax on the sale or purchase thereof. While deciding the matter, the honourable Supreme Court relied upon an earlier judgment in H. Anraj v. Government of Tamil Nadu [1986] 61 STC 165; [1985] Supp 3 SCR 812 (SC), which dealt with the issue as to whether lottery tickets are goods which could be subjected to tax under the sales tax laws. In Philco Export's case [2001] 124 STC 503, a division Bench of the Delhi High Court, following the dictum of law laid down in Vikas Sales Corporation's case [1996] 102 STC 106 (SC), held that the Duty Entitlement Pass Book Scheme (DEPB), which is intended to neutralise the intents of basic customs duty on the import content of the export produce, which has its own value and freely transferable in the market, cannot be treated as an actionable claim and has to be held to be a merchandise for all intents and purposes. Accordingly, it can be subjected to tax under the sales tax rules. In Sunrise Associates v. Government of NCT o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s thereafter considered and it was concluded that the material on record showed a uniform emphasis on the expansive manner in which the expression 'property' was understood. It was noted that debts, contracts and other chose-in-action were chattels no less than furniture or stock-in-trade. Similarly, patents, copyrights and other rights in rem were also included within the meaning of movable property. The court rejected the argument that REP licences were actionable claims within the meaning of section 3 of the Transfer of Property Act and said: 'When these licences/scrips are being bought and sold freely in the market as goods and when they have a value of their own unrelated to the goods which can be imported thereunder, it is idle to contend that they are in the nature of actionable claims. Indeed, in H. Anraj [1986] 61 STC 165 (SC); [1986] 1 SCC 414 the main contention of the petitioners was that a lottery ticket was in the nature of an actionable claim. The said argument was rejected after an elaborate discussion of law on the subject. We agree with the said decision and on that basis hold that the REP licences/exim scrips are not in the nature of actionable clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SCC 414 that lottery tickets are goods for the purposes of article 366(29A)(a) of the Constitution and the State sales tax laws, was correct. 37Para 34 in [2006] 145 STC. The word 'goods' for the purposes of imposition of sales tax has been uniformly defined in the various sales tax laws as meaning all kinds of movable property. The word 'property' may denote the nature of the interest in goods and when used in this sense means title or ownership in a thing. The word may also be used to describe the thing itself. The two concepts are distinct, a distinction which must be kept in mind when considering the use of the word in connection with the sale of goods. In the Dictionary of Commercial Law by A. H. Hudson (1983 edition) the difference is clearly brought out. The definition reads thus: '"Property".--In commercial law this may carry its ordinary meaning of the subject-matter of ownership. But elsewhere, as in the sale of goods it may be used as a synonym for ownership and lesser rights in goods.' Hence, when used in the definition of "goods" in the different sales tax statutes, the word "property" means the subjectmatter of o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion of retrospectivity. Further in our view, the answer to the question is available on a reading of Constitution Bench judgment of the honourable Supreme Court in Sunrise Associates' case [2006] 145 STC 576; [2006] 5 JT SC 168. Firstly, as is evident from para 31Para 28 in [2006] 145 STC of the Constitution Bench Judgment in Sunrise Associates' case [2006] 145 STC 576 (SC); [2006] 5 JT 168 (SC), the honourable Supreme Court did not go into the question of taxability of REP licences or DEPB, the issue having not been referred to the Bench. Meaning thereby that the judgment of the honourable Supreme Court in Vikas Sales' case [1996] 102 STC 106; [1996] 4 SCC 433 and of the Delhi High Court in Philco' case [2001] 124 STC 503 taking a view against the petitioner are available. Secondly, even if from discussions in other part of the judgment and the fact that H. Anraj [1986] 61 STC 165 (SC); [1986] 1 SCC 414, which had been relied upon in Vikas Sales Corporation's case [1996] 102 STC 106; [1996] 4 SCC 433 having been overruled, the judgment in Vikas Sales Corporation's case [1996] 102 STC 106; [1996] 4 SCC 433 should not be relied upon to negative the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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