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Aggrieved by such assessment orders, the assessee preferred appeal before the Appellate Assistant Commissioner.

3. The First Appellate Authority by common order dated 28.9.2000 and 16.10.2000, set aside the assessment and remanded the case back to the Assessing Officer for fresh consideration on the ground that at the time when the Assessing Officer passed the assessment order, the Judgment of the Hon'ble Supreme Court in the case of 20th Century Finance Corporation Ltd and another Vs. State of Maharashtra reported in 119 STC 182 was not before the Assessing Officer. There was a further direction to the Assessing Officer to verify the nature of transaction in each case with reference to the details and documents produced by the assessee in support of their claim and decide the liability or otherwise of the transactions, applying the legal principles laid down by the Hon'ble Supreme Court in the case of 20th Century Finance Corporation Ltd and another Vs. State of Maharashtra reported in 119 STC 182.

6. Aggrieved by such Assessment Orders, the assessee preferred appeal before the First Appellate Authority contending that the Assessing Officer did not apply the decision of the Hon'ble Supreme Court in the case of 20th Century Finance Corporation Ltd and another Vs. State of Maharashtra reported in 119 STC 182 and the directions contained in the remand order. Further, it was contended that the Assessing Officer took note of the final lease agreement alone which was produced in the set of sample documents without appreciating the fact that the import and inter-State purchase of equipments were effected by the assesee pursuant to an agreement to enter into a lease agreement between the assessee as the lessor and the customer as lessee who were very much in the picture before the commencement of the transfer of the leased goods to the business place of the lessee. Before the First Appellate authority, the assessee claimed exemption under section 3A(2)(a) of the Tamil Nadu General Sales Tax Act, in respect of import-lease and inter-State lease by placing reliance on the decision of the Hon'ble Supreme Court in the case of 20th Century Finance Corporation Ltd and another Vs. State of Maharashtra reported in 119 STC 182. In so far as the lease receipts pertaining to agreements entered into prior to 1.4.1986, it was contended that in the absence of charging section for levy of tax on transfer of right to use goods, prior to 1.4.1986, those transactions are not liable to tax.

10. Mr.P.Rajkumar, learned counsel appearing for the assessee, submitted that the Sales Tax Appellate Tribunal exceeded its jurisdiction in interfering with the remand portion of the order of the First Appellate Authority in respect of import-lease and inter-State lease transactions by relying upon the third proviso to Section 36(1) of the Tamil Nadu General Sales Tax Act. On merits it was contended that the finding of the Sales Tax Appellate Tribunal with regard to the import-lease and inter-State lease transactions is contrary to the law laid down in the decision of the Andhra Pradesh High Court in the case of I.T.C. Classic Finance and Services Vs. Commercial Taxes reported in 97 STC 330, which was affirmed by the Hon'ble Supreme Court in the case of 20th Century Finance Corporation Ltd and another Vs. State of Maharashtra. It is further submitted that the Sales Tax Appellate Tribunal over looked the fact that the taxable event under Section 3A of the Tamil Nadu General Sales Tax Act was transfer of the right to use goods and not exercise of the right by usage of the goods taken on lease or the payment of the lease amount. It is further submitted that in respect of transactions prior to 1.4.1986, the goods identified by the lessee prior to the agreement were moved from other States pursuant to the agreement directly to the lessees as by way of inter-State sales and the State Government has no authority to levy tax on such inter-State movement. In support of his contentions, the learned counsel relied on the decision of the Andhra Pradesh High Court in the case of I.T.C.Classic Finance and Services Vs. Commercial Taxes reported in 1997 STC 330, affirmed by the decision of the Hon'ble Supreme Court in the case of 20th Century Finance Corporation Ltd and another Vs. State of Maharashtra reported in 119 STC 182 and the decision of the Kerala High Court reported in (2007) 6 VST 805 (Ker) in the case of First Leasing Company of India Ltd Vs. State of Kerala. Learned counsel appearing for the assessee in order to demonstrate as to the nature of transaction between the assessee and the lessee, produced copies of the agreement to enter into lease agreement, proforma for opening letter of credit in favour of the foreign supplier, proforma invoice of the foreign supplier, Air Way Bill, Certificate of origin, packing list, copy of the bill of entry for home consumption and copy of lease agreements.

18. Therefore, to examine as to whether the transactions done by the assessee attract sales tax or not, the transactions/agreements have to be examined in the light of the law laid down by the Hon'ble Supreme Court in the case of 20th Century Finance Corporation Ltd and another Vs. State of Maharashtra reported in 119 STC 182. Likewise in the cases of levy of tax on inter-State lease, the First Appellate authority on examining the sample documents, held that inter-State purchases were effected only in pursuance of a contract to enter into a lease agreements and both the assessee and the lessee are in the picture even before the commencement of movement of goods from other State. Finding that the order of the Assessing Officer is not based on any particular lease, the First Appellate authority remanded the matter back to the Assessing Officer for fresh consideration with a direction to the assessee to produce all original documents before the Assessing Officer with a direction to the Assessing Officer to decide the liability in the light of the decision of the Hon'b le Supreme Court in the case of 20th Century Finance Corporation Ltd and another Vs. State of Maharashtra reported in 119 STC 182.