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TMI Blog2008 (6) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... dia) Pvt. Ltd. v. State of Kerala [2005 (12) TMI 536 - KERALA HIGH COURT]. These revision petitions require to be rejected - S.T. Rev. Nos. 2627 of 2004 & 12 of 2006 - - - Dated:- 23-6-2008 - DATTU H.L. C.J. AND BASHEER A.K., JJ. ORDER:- The order of the court was made by H.L. DATTU C.J. In all these sales tax revisions, the one and only question that arises for our consideration and decision is, whether the royalty income received by the assessee from the franchisees for the use of the trade mark is exigible to tax under the Kerala General Sales Tax Act, 1963 ( the KGST Act , for short) in the hands of the assessee. The other question is whether, in the facts and circumstances of the present case, can it be said that there e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are in complete agreement with the observations made by this court in Associated Cement Companies Ltd. [2001] 124 STC 59 (SC); [2001] 4 SCC 593. A software programme may consist of various commands which enable the computer to perform a designated task. The copyright in that programme may remain with the originator of the programme. But the moment copies are made and marketed, it becomes goods, which are susceptible to sales tax. Even intellectual property, once it is put on to a media, whether it be in the form of books or canvas (in case of painting) or computer discs or cassettes, and marketed would become goods . We see no difference between a sale of a software programme on a CD/ floppy disc from a sale of music on a cassette/CD o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of right to use any goods for any purpose for cash, deferred payment or any other valuable consideration in the State of Maharashtra. Under section 3 of the Act, tax is leviable on the turnover of sales in respect of transfer of right to use any goods. 'Turnover of sales' has been defined in clause (15) of section 2 to mean aggregate of the amounts of sale price received or receivable during the year by a dealer in respect of the transfer of the right to use any goods. 'Sale price' has been defined in clause (11) of section 2 to mean the amount of valuable consideration received or receivable for the transfer of the right to use any goods for any purpose. The transfer of right to use any goods for any purpose is regarded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The 1985 Act was enacted for the purpose of levying tax on the transfer of right to use the goods. It is not applicable to transfer of right or title in the goods which may attract the provisions of the Bombay Sales Tax Act. In case of trade mark, what is taxable under the 1985 Act is the transfer of right to use the trade mark. Admittedly, by agreement between the assessee and M/s. Salstar Foods Beverages Ltd., there was a transfer of right to use the trade mark to M/s. Salstar Foods Beverages Ltd. The royalty of Rs. 1,500 was payable in respect of transfer of the right to use the trade mark. Such transfer clearly falls within the provisions of the 1985 Act. 7.. 'Trade mark' has been defined in section 2(1)(v) of the Trade an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e transferred by transferor to the transferee, without transfer of control over it. The case before the Andhra Pradesh High Court in Rashtriya Ispat Nigam Ltd. v. Commercial Tax Officer [1990] 77 STC 182 was a case of transfer of right to use machinery. It was in that context, the above decision came to be rendered. But the position in case of trade mark is different. For transferring the right to use the trade mark, it is not necessary to hand over the trade mark to the transferee or give control or possession of trade mark to him. It can be done merely by authorising the transferee to use the same in the manner required by the law as has been done in the present case. The right to use the trade mark can be transferred simultaneously to an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can only be taken as transfer of a right to use and not a mere right to enjoy. Simply because the assessee retained the right for himself to use the trade mark and reserved the right to grant permission to others to use the trade mark, it would not take away the character of the transaction as one of transfer of a right to use. That being so, this Court has to only hold that the order of the Tamil Nadu Taxation Special Tribunal, Chennai, confirming the order of the Joint Commissioner-III (SMR), Chepauk, is well in order. We are in respectful agreement with the view expressed by the learned Judges in those two decisions. However, Sri. K.I. Mayankutty Mather, learned counsel appearing for the assessee, has invited our attention to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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