9911796707
TMI Blog2011 (10) TMI 568X X X X Extracts X X X X X X X X Extracts X X X X ..... (for short, the APVAT Act ) and the Act and it is on the rolls of the Commercial Tax Officer, Nacharam Circle, Hyderabad, who is the second respondent in both the writ petitions. Admitted facts are these. For the AY 2005-06, the petitioner-company had certain business transactions with four companies situated at Bangalore, viz., (1) M/s. Texas Instruments (India) (P) Ltd., (for short, TI ) (2) M/s. Beecen Communications (P) Ltd., (3) M/s. Purple Vision Technologies (P) Ltd. and (4) Society for Integrated Circuit Technology and Applied Research and also two Hyderabad based companies. Then for AY 2006-07 the petitioner-company had again business transactions with TI, i.e., the first of the four Bangalore based companies referred to supra and also a Hyderabad based company. The second respondent by his assessment order dated July 11, 2008 passed under the Act assessed the taxable turnover of the petitioner with the aforesaid four Bangalore based companies for AY 2005-06 at ₹ 2,65,75,770 treating them as sale of software by way of inter-State sales and levied a tax of 10 per cent on the said turnover. Similarly by another order also dated July 11, 2008 the second respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provided by the petitioner to its Bangalore client companies is merely a service and there is no transfer of software/goods as that expression is defined in entry 39(14) or any other entry under the Fourth Schedule to the APVAT Act. He also argued that as the transactions of the petitioner with the four Bangalore based companies constitute merely providing service they are not taxable either under the Act or under the APVAT Act as the transactions of the petitioner have already been subjected to service tax by the Central Government. The other contention of Dr. Viswanath is that even assuming for a moment that any goods in the form of software or otherwise came into existence in the course of the business transactions of the petitioner with its client companies at Bangalore such software or goods must be deemed to have come into existence at the business places of its clients in Bangalore, i.e., in Karnataka and must be held to belong to them under the terms of agreements and therefore it cannot be said that there is movement of software/goods from our State to Karnataka and consequently the levy of tax is impermissible under law. In support of his above two contentions, Dr. V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... third point. A perusal of both the impugned assessment orders would show that the assessing authority concluded that the petitioner developed and delivered certain software programmes to the TI in the course of inter-State sale. Its actual observations in the assessment order for 2005-06 read as follows: . . . The scrutiny of all copies of work orders reveals that the company have developed and delivered the following software programmes to the customer-company as per the specifications laid down in each work order:- (1) RLT Activity for MSTC. (2) Test and support board/equipment, fixing boards/cables, debugging the boards for fault rectifications, ESD set up installation and audit work. (3) Test and support board/equipment bring up activities. (4) RLT design. The same observations are made in the assessment order for the AY 2006-07. After reaching the above conclusion, the assessing authority then proceeded to calculate the value of the above sales. In reaching that conclusion the assessing authority relied upon a copy of the Master's Software Development Agreement dated November 16, 2004 (MSDA) between the petitioner and the TI, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Bangalore, i.e., TI and other three companies mentioned supra and it was not supplying or selling any software. The assessing authority, as already mentioned, concluded that the petitioner sold software programmes, viz., (1) RLT Activity for MSTC, (2) Test and support board/equipment, fixing boards/cables, debugging the boards for fault rectifications, ESD set up installation and Audit work, (3) Test and support board/equipment bring up activities and (4) RLT design. There is no discussion by the assessing officer as to how the above four items constitute software when the software is to be supplied according to the terms of MSDA by the TI to the petitioner. There is no clear cut discussion and reasoning as to how the above items which are support board, fixing boards/cables and audit work constitute software. It is also not made clear as to how RLT activity constitutes software. The assessing officer should have clearly determined keeping in view the meaning of software as to what was the software that was developed and sold by the petitioner. This the assessing officer has not done. Added to this, the petitioner's case is that according to MSDA and its dealings with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the case of the petitioner that its services to its client companies at Bangalore have been subjected to service tax by the Central Government and this aspect and its bearing on the petitioner's contentions which are referred to supra have also not been considered by the assessing authority and as well as the appellate authority. Hence this is also a point in favour of the petitioner. The learned Government Pleader could not put forward any convincing reasons to sustain the impugned orders of assessment. It may be noted that this court sitting under article 226 of the Constitution cannot go into the above aspects which involve disputed questions of fact and it is only for the assessing authority or the other prescribed authorities under the APVAT Act and the Act to go into the same by examining the material available on record and also calling for additional material if necessary. Hence we are of the opinion that the assessment orders in question should be set aside and the matters remitted back to the primary assessing authority for making fresh assessments in accordance with law keeping in view the short-comings in the assessment orders noticed by us. Both the writ pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
