THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN TAX REVISION CASE No.270 of 2010 % Dated: 03.11.2010 Between: M/s.Jasper Aqua Exports Private Limited …Petitioner and The State of Andhra Pradesh, Rep. by the SR before STAT, Visakhapatnam Bench, Visakhapatnam. …Respondent ! Counsel for the Petitioner: Dr S.R.R.Viswanatha ^Counsel for the Respondent: Special Standing Counsel for Commercial Taxes Sri Krishna Koundinya <Gist: >Head Note: ?Citations: 1. (2008) 13 VST 403 (All) 2. (2008) 14 VST 58 (All) 3. (2008) 16 VST 226 (All) 4. (2008) 16 VST 381 (All) 5. (2009) 22 VST 70 (Gauhati) 6. (2009) 22 VST 136 (Gauhati) 7. (2009) 25 VST 522 (Orissa) 8. (2009) 25 VST 653 (Delhi) 9. (2002) 126 STC 114 : (2002) 3 SCC 314 : AIR 2002 SC 1305 10. (1990) 77 STC 182 THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN TAX REVISION CASE No.270 of 2010 November 03, 2010 Between: M/s.Jasper Aqua Exports Private Limited … Petitioner And The State of Andhra Pradesh, Rep.by the SR before STAR, Visakhapatnam Bench, Visakhapatnam. ... Respondent THE HON'BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN TAX REVISION CASE No.270 of 2010 ORDER: (Per Hon’ble Sri Justice V.V.S.Rao) The petitioner is an aqua company. They are dealers in processing and selling prawns. They are dealers on the rolls of Commercial Tax Officer (CTO), Chinawaltair, Visakhapatnam. For the year 2002-2003, the CTO finalized assessment under Andhra Pradesh General Sales Tax Act, 1957 (the Act, for brevity) vide proceedings dated 23.10.2005, determining the net turnover of Rs.48,52,540/- out of the gross turnover of Rs.3,96,63,230/-. The Deputy Commissioner (DC), Commercial Taxes (CT), Visakhapatnam, noticed that the petitioner received an amount of Rs.68,61,894/- as per the trading account, which included truck hire receipts of Rs.11,76,786/-. As these receipts were not assessed to tax, the DC proposed to revise the Order under Section 20(2) of the Act and issued revisional show cause notice. In response to which, the petitioner sought personal hearing. The same was afforded, during which objections were filed. Considering those objections, by proceedings, dated 05.03.2009, the DC revised the assessment and determined the net turnover of Rs.59,42,150/- assessable to tax. This includes an amount of Rs.10,89,620/- being hire charges under Section 5E of the Act, on which tax at 8% (Rs.87,169/-) was levied. The petitioner, then, appealed under Section 21 of the Act to the Sales Tax Appellate Tribunal (the Tribunal, for brevity). They were unsuccessful. Their appeal having been dismissed by the impugned order, dated 18.12.2009, the dealers are in revision under Section 22 of the Act. The counsel for the petitioner submits that in a case of revised assessment, the burden lies on the Revenue. As they did not adduce any evidence, the plea of the petitioner that they only rendered service and did not effect transfer of right to use their trucks for transporting the produce of other aqua firms. The counsel would urge that as and when the petitioner’s custom built refrigerated trucks are idle, so as to help other peers in the business, they sent trucks and collect nominal charges, and that the travel and other staff as well as the truck operations are controlled by the petitioner itself and they never come under the control or possession of other Concern to whom the trucks are sent. Therefore, he would urge that Section 5E of the Act is not attracted and the hire charges cannot be taxed. He relies on Commissioner, Trade Tax v Jamuna Prosad Jaiswal[1], Commissioner of Trade Tax v D.R.Zindal & Sons[2], CIT v Regional Manager, UPSRTC[3], CIT v Nand Transport Company[4], IOCL v Commissioner of Taxes[5], R.P.Kakoti v ONGC[6], State of Orissa v Dredging Corporation of India[7], Commissioner, VAT v International Travel House[8], State of Andhra Pradesh v Rashtriya Ispat Nigam Limited[9] and Rashtriya Ispat Nigam Limited v Commercial Tax Officer[10] (RINL). Per contra, the special counsel for CT[11] submits that when the show cause notice was issued by the DC (CT), the petitioner admitted that they undertook the transport of the goods given by the customer and charged amount for transport. This would be sufficient to come within the ambit of Section 5E of the Act read with Explanation IV to Section 2(n) (definition of ‘sale’) of the Act. He also invites the attention of this Court to Article 366(29A)(d) of the Constitution of India. He would urge that the moment the petitioner’s trucks are used for transporting the prawns and other goods of other aqua companies and others, notwithstanding the control over the driver, there is deemed to be ‘sale’ under Section 5E of the Act. According to the senior counsel, the vehicle is given by the petitioner to other Concern alone for a specified period and that would be sufficient to infer the taxable event for the purpose of Section 5E of the Act. We have considered the submissions of the counsel and perused the impugned order and various decisions cited by the petitioner. The four decisions of Allahabad High Courts, all by Hon’ble Justice Rajes Kumar, were held against the Revenue holding that being a question of fact, a revision would not lie. There is no ratio in any of these Judgments. Insofar as the case from Orissa High Court in Dredging Corporation is concerned, it was also decided on the facts applying the test of transfer of control over the goods. The decision in Gauhati High Court in Indian Oil Corporation is a case of alleged transferee hiring the oil tankers for supply of petroleum tankers to dealers, and therefore, the Court therein held that there is no transfer of right to use the goods. These decisions are of no assistance to the petitioner in the factual background herein. We have also perused the decision of this Court in RINL, which is confirmed by the Supreme Court in State of Andhra Pradesh v Rashtriya Ispat Nigam Limited as well as Bharat Sanchar Nigam Limited v Union of India[12]. Before turning to the core issue, we may observe that the decision of a coordinate Bench or the Supreme Court is not binding as such. What is binding is the law laid down in the precedent and the ratio that can be culled out from the decisions cited. A decision is an authority for what it decides and to say that a decision of the superior Court has universal application irrespective of the discernible and drastically deviating factual background is to disrespect the precedent itself. A case involving a mixed question of fact and law, as in this case; whether there is a transfer of property in the refrigerated vehicles of the petitioner to another Concern, as defined in Article 366(29A)(d)) of the Constitution of India and Section 5E(a) of the Act is always a question, for first appreciating and considering the taxable event and the applicability of the law. If the first thing is absent, there is no question of applying 5E of the Act. But, if on considering the taxes, the attending circumstances and the contract of sale, it is reasonably possible to infer that there is indeed transfer of right to use the refrigerated vehicles by the petitioner. The decided cases, though of guidance, may not govern the case on hand. Article 366(29A)(d) of the Constitution is to the effect that, “tax on the sale or purchase of goods” includes “a tax on the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration”. As per Explanation IV to Section 2(n) of the Act defines ‘sale’ as including’, “a transfer of right to use any goods for any purpose for any period for monetary or non-monetary consideration shall be deemed to be a sale”. We may quote Section 5E, which is relevant for reference. 5E. Tax on the amount realized in respect of any right to use goods: Notwithstanding anything contained in this Act:- (a) Every dealer who transfers the right to use any goods for any purpose, whatsoever, whether or not for a specified period, to any lessee or licencee for cash, deferred payment or other valuable consideration, in the course of his business shall, on the total amount realized or realizable by him by way of payment inc ash or otherwise on such transfer or transfers of the right to use such goods from the lessee or licencee, pay a tax at the rate of eight paise on every rupee of the aggregate of such amount realized or realizable by him during the year; (b) the transfer of right to use any such goods entered into by any dealer, shall be deemed to have taken place in this State whenever the goods are used within the State, irrespective of the place where the agreement whether written or oral for such transfer of right is made. Provided that no such tax shall be levied if the total turnover of the dealer including such aggregate is less than Rs.two lakhs. Reading the relevant statutory provisions, it becomes clear that the moment the petitioner sends its trucks to others for transporting the latter’s goods to destinations of the latter’s choice, the same amounts to transfer of the right to use the trucks, and would be sufficient to infer a taxable event under Section 5-E of the Act notwithstanding other incidental minor aspects of the contracts. The mere fact that the petitioner retains control over the driver, or that they pay insurance charges for the trucks, is of no consequence. In that view of the matter, we do not find any error in the Orders of the Learned Tribunal, because the Tribunal correctly relied on way bills and other relevant documents produced by the petitioner and came to the correct conclusion. In the result, the tax revision case is accordingly dismissed. No costs. _______________ (V.V.S.RAO, J) ______________________________ (RAMESH RANGANATHAN, J) 03.11.2010 Note: LR copy be marked. (By order) Pln [1] (2008) 13 VST 403 (All) [2] (2008) 14 VST 58 (All) [3] (2008) 16 VST 226 (All) [4] (2008) 16 VST 381 (All) [5] (2009) 22 VST 70 (Gauhati) [6] (2009) 22 VST 136 (Gauhati) [7] (2009) 25 VST 522 (Orissa) [8] (2009) 25 VST 653 (Delhi) [9] (2002) 126 STC 114 : (2002) 3 SCC 314 : AIR 2002 SC 1305 [10] (1990) 77 STC 182 [11] This is a case of summary disposal but at our request, the special counsel Mr Krishna Koundinya appeared and made submissions. [12] (2006) 145 STC 91 (SC) : (2006) 3 SCC 1