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TMI Blog2008 (7) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... d and sold by the petitioner with or without obligation, for system upgradation, repairs and maintenance or employee training are 'Goods' within Art. 366(12) of the Constitution of India r/w Sec. 2(d) of the Central Sales Tax Act 1956 [for short, 'CST Act'] and corresponding to Sec. 2(j) of the Tamil Nadu General Sales Tax Act, 1959 [for short, 'TNGST Act'] and, therefore, the petitioner is producer and processors of such software for export are entitled to the beneficial provisions of Sec. 8(3) of the CST Act r/w Rule 13 of the Central Sales Tax (Registration and Turnover) Rules, 1957. In the light of the declaration, they sought for a restrained order to the respondents from refusing to issue Form 'C' Declaration and initiating penalty proceedings under Sec.10-A of the CST Act as illegal, unconstitutional and without jurisdiction. 2. In W.P. No. 38545 of 2005, the challenge is to the order dated 31.10.2005 passed by the first respondent pursuant to the direction issued by this Court. Earlier, the petitioner moved this Court with W.P. No. 30101 of 2005 and this Court, vide order dated 17.9.2005, set aside the earlier order dated 01.9.2005 passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside the order and to consider their request in accordance with law. The petitioner was once again informed by an order dated 31.10.2005 that the petitioner is not entitled to use 'C' Form for their purchases for use in their service contract relating to uncanned software which are not amenable to the sales tax law. 9. In passing the order dated 10.01.2002, the Department relied upon the judgment of the Andhra Pradesh High Court in Tata Consultancy Services v. State of Andhra Pradesh [(1997) 105 STC 421]. Subsequently, the matter was taken to the Supreme Court. The Supreme Court decided the issue vide its judgment in Tata Consultancy Services v. State of Andhra Pradesh [2005 (1) SCC 308. The Constitution Bench of the Supreme Court, by its judgment, held that the branded software is 'goods'. They were also in agreement with the submission made by the petitioner in that case that there was no distinction between branded and unbranded software. But the majority opinion in the said judgment held that as they were not dealing with the unbranded software when it is marketed / sold as a good and are not expressing any opinion on that issue. 10. However, S.B. Sinha, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l claim on the basis of those comments. Nevertheless, the remarks of the Supreme Court in the above Judgment are given respectful consideration as follows : The Supreme Court has observed - In India the test to determine whether a property is 'goods', for purpose of sales tax, is not whether the property is tangible or intangible or incorporeal. [Emphasis added] 12. It is clear from the said order that the authority went only by the opinion expressed by the majority and except for referring to it did not give due consideration to the concurring opinion made by S.B. Sinha, J. Be that as it may. The said question once again, came up before the Supreme Court in the judgment relating to Bharat Sanchar Nigam Ltd. and another v. Union of India and others [2006 (3) SCC 1 (2006) 145 STC 91] wherein the Supreme Court categorically affirmed the opinion of Sinha, J. and paragraphs 56 and 57 in this regard may be reproduced below:- Para 56: This view was adopted in Tata Consultancy Services v. State of A.P. for the purposes of levy of sales tax on computer software. It was held: (SCC p. 342, para 81) A goods may be a tangible property or an intangible one. It would beco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any geographical limitation and neither manufacture nor sale is restricted to the territory of Delhi. There are no words like inside the Union Territory of Delhi to qualify manufacture or sale and there is no cogent or compelling reason for reading such words in Section 5(2)(a)(ii) and the second proviso. The use of the goods purchased as raw materials in the manufacture of goods may, therefore, take place anywhere and not necessarily inside Delhi and equally the sale of the goods so manufactured may be effected anywhere, whether inside or outside Delhi. The only end-use of the goods purchased required to be made for attracting the applicability of Section 5(2)(a)(ii) is that the goods must but utilised by the purchasing dealer as raw materials in the manufacture of goods and the goods so manufactured must be sold, irrespective whether the manufacture or sale takes place inside Delhi or outside. If the purchasing dealer does not use the goods purchased as raw materials in the manufacture of goods or having manufactured the goods does not sell them, he would commit a breach of the intention expressed by him in the declaration furnished to the selling dealer and the second proviso wo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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