IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN TUESDAY, THE 17TH FEBRUARY 2009 / 28TH MAGHA 1930 ST.Rev..No. 7 of 2009 ----------------------- TA.362/2007 of S.T.A.T.ADDL.BENCH-I,ERNAKULAM .................... REVISION PETITIONER/APPELLANT/ASSESSEE: -------------------------------------------------- SKYLINE E.TECH, ERNAKULAM BY ADV. SRI.V.V.ASOKAN SMT.S.AMINA RESPONDENT/RESPONDENT/REVENUE: ------------------------------------------ STATE OF KERALA, REPRESENTED BY JOINT COMMISSIONER(LAW), COMMERCIAL TAXES, ERNAKULAM. BY SPL. GOVERNMENT PLEADER(TAXES), SRI.VINOD CHANDRAN THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 17/02/2009,ALONG WITH STRV NOS. 15 & 17 OF 2009, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: C .N. RAMACHANDRAN NAIR & K. SURENDRA MOHAN, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - S.T.Rev. No. 7, 15 & 17 OF 2009 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 17th day of February, 2009 JUDGMENT Ramachandran Nair,J. Heard counsel appearing for the petitioner and Special Government Pleader appearing for the respondent. The question raised as to whether customized software developed and sale of the same attracts sales tax is covered by the decision of Supreme Court in the case of Tata Consultancy Services v. State of A.P.[2005(1) SCC 308] against the assessee and in favour of the State. However, counsel for the petitioner submitted that some of the works are for customers abroad and softwares were developed at their site. According to him, the amount received should be treated as export turnover, if at all software developed is treated as goods. However, Special Government Pleader(Taxes) submitted that petitioner has not developed software and sold it in the course of export to claim exemption on export sales. On going through the orders, we find that the petitioner had local and interstate sales turnover of software and the same was assessed based on accounts. However, counsel STRV : 7,15 & 17 of 2009 -:2:- submitted that original accounting and filing of returns are as a result of mistake and thereafter petitioner had filed revised returns furnishing the details. After hearing counsel on both sides and after going through the orders, we do not find any ground to interfere with the assessment of the local sales turnover of software developed for customers. Eventhough counsel contended that sales are not local in as much as software for customers were developed at site outside Kerala, there is nothing to indicate that petitioner has remitted tax in any other State, treating the transaction against as local sales in those States. Therefore, the contention of the petitioner that sales are outside Kerala is unacceptable. However, we feel if any software is developed abroad and if any part of the turnover represents consideration received from foreign country in convertible foreign exchange, petitioner should not be assessed for the same in India. Petitioner is given freedom to furnish the copies of contracts and foreign remittance received in India towards consideration for the software developed outside India. The Revision Petitions are disposed of granting freedom to the petitioner to furnish the copies of STRV : 7,15 & 17 of 2009 -:3:- contracts and foreign remittance received in India with direction to the assessing officer to consider exemption and modify the assessment to the extent required. (C.N.RAMACHANDRAN NAIR) Judge. (K. SURENDRA MOHAN) Judge. ttb STRV : 7,15 & 17 of 2009 -:4:-