N C R CORPORATION INDIA PVT LTD Vs. DEPUTY COMMISSIONER OF COMMERCIAL TAXES

JUDGEMENT

(1.) THE petitioner is a private limited company registered under the Companies act and having its registered office at Bangalore. The petitioner has a manufacturing unit at Pondicherry. The petitioner is registered under the Karnataka Sales Tax Act (hereinafter for short referred to as 'the KST Act') and central Sales Tax Act, (hereinafter for short referred to a 'the CST Act' ). The petitioner is engaged in the business of manufacture and supply of ATMs and manufacture, supply and trading of their parts and accessories. The petitioner also undertake Annual Maintenance contracts (AMCA) for maintenance of ATMs. In so far as sale of parts and accessories of atms and maintenance of ATMs under the amca and construction of ATM rooms by the petitioners branch in Bangalore are concerned, the petitioner has admitted its liability and filed returns for the assessment years 2002-03, 2003-04, 2004-05, 2005-06, and also 2006-07 under the KST and CST Acts. The petitioner has been duly assessed to tax on the turnover relating thereto. The petitioner has produced the assessment orders passed under Section 12 (2) of the KST Act and under Section 9 (2) of the CST Act for the assessment years 2002-03 to 2004-05. For the year 2005-06 the assessment orders have been passed under Section 38 of the Karnataka value Added Tax Act (hereinafter for short referred to as 'the KVAT Act') and the orders are also produced.

(2.) THE Assistant Commissioner of Commercial Taxes (Intelligence), South Zone, bangalore, inspected the business premises of the petitioner branch in Bangalore and seized certain books of accounts and documents relating to the assessment years 2002-03 to 2004-05 pursuant to an order of seizure dated 11-1-2007 under Section 28 (3) of the KST act. Thereafter, a notice under Section 12a of the KST Act came to be issued for re-assessment for the period 2002-03 to 2006-07. The petitioner gave a detailed reply. Thereafter, the respondent proceeded to pass the reassessment orders on 25-3-2008 under Section 12a of the KST Act and under Section 39 of the KVAT Act, correspondingly for the years 2002-03 to 2006-07. The respondent held that the sale of ATMs by the petitioner from Pondicherry to Banks who are purchasers in Karnataka are local sales liable to tax under KST Act and KVAT Act. The respondent has also issued a demand notice claiming huge amount for the aforesaid periods. Aggrieved by the same, the petitioner has preferred these petitions.

(3.) SRI. K. P. Kumar, the learned senior counsel assailing the impugned order contends that admittedly the goods have moved from pondicherry to Bangalore in pursuance of a purchase order placed by the various banks with the petitioner at Pondichery. They are delivered at the site of the banks. Therefore, the petitioner was liable to pay tax under the cst Act which he has paid. While bringing those ATMs into Karnataka, petitioner has also paid entry tax after 2004. There is no liability to pay tax either under the KST Act or under the KVAT Act. The respondent by wrongly applying the ratio laid down by the apex Court in the 20th Century Finance Corporation Limited and Another v. State of maharashtra (2000 (119) STC 182 : (AIR 2000 SC 2436) case has held, as the delivery of goods took place at Bangalore it is a local sale and the petitioner has to pay tax under kst Act and KVAT Act. The said judgment has no application to the facts of the case and he has ignored the series of judgments of the supreme Court which clearly held, when once there is movement of goods from one State to another, it constitutes an inter-State sale and the State legislature has no jurisdiction or power to levy any sales tax on such sales and, therefore, he seeks for quashing of the said orders.