THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION Nos.12348, 31623, 31624 and 31666 of 2010 Date:16.03.2011 Between: M/s.Naveen Gas Agencies, D.No.14-1-12, Gandhinagar, Hapuram Complex, Vijayawada, Krishna District, Represented by its Proprieter A.Ramana Rao .. Petitioner And The Commercial Tax Officer, Seetharamapuram Circle, Vijayawada and another .. Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION Nos.12348, 31623, 31624 and 31666 of 2010 COMMON ORDER: (Per Hon’ble Sri Justice V.V.S.Rao) This group of four writ petitions is being disposed of by this common order as the factual background, and the issues which arise for consideration are the same. All the petitioners entered into an agreement with Bharat Petroleum Corporation Limited (BPCL) having their registered office at Mumbai for providing truck/trucks for transporting Liquefied Petroleum Gas (LPG) cylinders of BPCL to various delivery centres. The jurisdictional Commercial Tax Officer assessed the transportation charges received by the petitioners to Value Added Tax (VAT) under Section 4(8) of the Andhra Pradesh Value Added Tax Act, 2005 (the VAT Act). The assessing officer assumed that the transfer by the petitioners of their right to use their truck/trucks is a deemed sale, and that the situs of sale is in Andhra Pradesh attracting VAT under Section 4(8) of the VAT Act. The petitioners contend that the activity of transportation of LPG from one place to another place, on the basis of fixed charges in relation to the distance involved, does not attract VAT under the VAT Act, and does not fall within the definition of sale/deemed sale. They would further contend that the petitioners themselves are using the goods from various tankers, collecting transportation charges, and the vehicle supplied by them can be used by BPCL for any work other than transporting LPG cylinders. This Court, while admitting these writ petitions, passed orders directing the respondents not to take any coercive steps. It is brought to our notice that the petitioners in these writ petitions, (except in W.P.No.12348 of 2010), have deposited certain amounts, as directed by this Court, while granting stay. The parameters and tests to determine whether there is a transfer of the right to use goods, within the meaning of Explanation IV to Section 2(28) read with Section 4(8) of the VAT Act, are well settled. This Court, relying on 20th Century Finance Corporation Limited v. State of Maharastra[1] and BSNL v. Union of India[2] and other binding precedents, culled out various principles in two unreported judgments, namely, G.S.Lamba and Sons v. Sales Tax Appellate Tribunal, Hyderabad[3] and M/s.Viceroy Hotels Limited v. the Commercial Tax Officer, General Bazar Circle, Hyderabad[4]. In a nutshell existence of goods which are to be delivered, the agreement to transfer the goods, and the availability of goods by the lessee, are three core conditions which must exist for inferring the transfer of the right to use goods. It is also well settled that the place of agreement, or the place where the parties entered into agreement, would be the situs of the sale where tax can be levied. A fundamental question is raised before us that the agreement between the petitioners and BPCL was entered into at Chennai. A copy thereof is now placed for the first time before us. Clause 33, thereunder, is to the effect that, ‘the agreement shall be deemed to have been made in Chennai’. The petitioners would contend that when the situs of sale is in Chennai, the Commercial Tax Officer has no jurisdiction to tax transportation charges received by the petitioner. The Special Counsel for the Commercial Taxes opposed the writ petitions. He would urge that the evidence as to the place of the agreement between the parties, which was placed before this Court for the first time, was not placed before the assessing officer. There is no dispute on this aspect. In such circumstances, it would not be proper for this Court to determine the exigibility to tax as it is a question of fact. We deem it appropriate that, in the first instance, the assessing officer should examine this issue. We give liberty to the petitioners to place copies of the agreements before the assessing officer for determining whether the situs of sale is in Andhra Pradesh or in Chennai. Accordingly, we allow these writ petitions and remand the matter to the first respondent to take necessary action, after giving notice to the petitioners, keeping in view the observations hereinabove. There shall be no order as to costs. ____________ V.V.S. RAO, J _____________________________ 16.03.2011 RAMESH RANGANATHAN, J KH [1] (2000) 6 SCC 12 [2] (2006) 3 SCC 1 : (2006) 145 STC 91 [3] T.REV.C.No.154 of 2010 and batch, Dated 28.01.2011 [4] W.P.No.17092 of 2010, Dated 23.02.2011