Kerala High Court
Stateof Kerala vs M/S.Techsmith Software (P) Ltd on 31 August, 2015
Author: Antony Dominic
Bench: Antony Dominic, Dama Seshadri Naidu
IN THE HIGH COURT OF KERALAAT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE ANTONY DOMINIC
&
THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU
WEDNESDAY, THE 1ST DAYOF JUNE 2016/11TH JYAISHTA, 1938
OT.Rev.No. 48 of 2016 ()
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AGAINST THE ORDER/JUDGMENT IN TA(VAT) 307/2014 of KERALA VATAPPELLATE
TRIBUNAL, ERNAKULAM DATED 31-08-2015
REVISION PETITIONER(S)/RESPONDENT/RESPONDENT/REVENUE:
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STATEOF KERALA
REP. BY THE DEPUTY COMMISSIONER (LAW),
COMMERCIAL TAXES, ERNAKULAM.
BY SR GOVT PLEADER SMT.SOBHAANNAMMA EAPEN
RESPONDENT(S)/APPELLANT/APPELLANT/ASSESSEE:
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M/S.TECHSMITH SOFTWARE (P) LTD.
P.T. USHA ROAD, ERNAKULAM PIN 682 011.
R1 BY ADV. SMT.S.K.DEVI
R1 BY ADV. SRI.M.RAJ MOHAN
R1 BY ADV. SRI.SANTHOSH P.ABRAHAM
THIS OTHER TAX REVISION (VAT) HAVING BEEN FINALLY HEARD ON
01-06-2016, ALONG WITH ORTV.51/16, THE COURT ON THE SAME DAY PASSED THE
FOLLOWING:
APPENDIX IN OTRV.48/16
PETITIONER'S EXHIBITS:
ANNEXURE A: A TRUE COPY OF THE ASSESSMENT ORDER FOR THE YEAR 2010-11.
ANNEXURE B: A TRUE COPY OF THE ORDER OF THE ASSISTANT COMMISSIONER
(APPEALS), COMMERCIAL TAXES, ERNAKULAM.
ANNEXURE C: A CERTIFIED COPY OF THE ORDER OF THE TRIBUNAL DATED
31.8.2015.
ANNEXURE C(a): A TRUE COPY OF ANNEXURE C.
/True copy/
PS to Judge
ANTONY DOMINIC & DAMA SESHADRI NAIDU, JJ.
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O.T.Rev.Nos.48 & 51 of 2016
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Dated this the 1st day of June, 2016
O R D E R
Antony Dominic, J.
1.These revisions are filed by the Revenue challenging the common order passed by the Kerala Value Added Tax Appellate Tribunal, Ernakulam in TA VAT.No.307/14 and 308/14 respectively. Briefly stated, the case as disclosed in the records show that during the assessment years 2010-11 and 2011-12, the respondent, a registered dealer, had effected sale of software (IT products). After the assessment was completed, an audit visit was conducted by the Commercial Tax Officer under section 23 of the KVAT Act. On inspection of the books of records, it was found that the assessee had received certain amounts towards customization charges which was not included in the return filed by them. Treating the customization charges thus received by the assessee as part of its turn over, proceedings were initiated by issuing a pre-assessment notice. The assessee contended that the customization charges received by it were not part of sale consideration but was received for the OTRV.48/16 & 51/16 2 service rendered by it after the sale of the softwares in question. However, rejecting the said contention, the Assessing Officer completed the assessment. Though the order was confirmed in appeal, the first appellate authority reduced the addition made. The assessee challenged the order before the Tribunal and the Tribunal set aside the impugned orders. It is in this background, the revision petitions are filed.
2.We heard learned Government Pleader and the counsel appearing for the assessee.
3. The short question that is required to be considered for the disposal of these revision petitions is whether the view taken by the Tribunal that the customization charges received by the assessee are not part of the turn over is legal or not. Having bestowed our attention to the contentions raised, we find that admittedly, customization charges to the software products sold by the assessee was received by the assessee after the sale was completed. The sale proceeds received by the assessee was also OTRV.48/16 & 51/16 3 declared in the return filed by it. It is also admitted that for the customization charges received, the assessee had paid service tax. 'Sale price' has been defined to mean the valuable consideration received or receivable by a dealer for the sale of any goods less any sum allowed as cash discount, according to the practice normally prevailing in the trade, but inclusive of any sum charged for anything done by the dealer in respect of the goods or services at the time of or before delivery thereof, excise duty, special excise duty or any other duty or taxes except the tax imposed in the KVAT Act. The customization charges are admittedly received by the assessee after the delivery of the goods to the customer. This, therefore, means that the levy of customization charges does not satisfy the requirements of the Act to classify it as part of sale price. If that be so, customization charges could not have formed part of the sale consideration of the assessee and for its non inclusion in its return, the assessee could not have been faulted. We find no reason to interfere with the impugned order. Revisions fail and are accordingly dismissed. OTRV.48/16 & 51/16 4
4.Learned Government Pleader contended that the question whether in the process of customization, any goods have been transferred to qualify it to be a case of works contract requires to be examined. However, we find that such a question was not raised or considered by anyone of the authorities and therefore, at this revisional stage, that question cannot be considered.
Sd/-
ANTONY DOMINIC, Judge.
Sd/-
DAMA SESHADRI NAIDU, Judge.
kkb.