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High Court of Judicature at Bombay
S.C. DHARMADHIKARI & SUNIL P. DESHMUKH, JJ.
TATA SONS Limited & Another - Petitioners
Versus
The State of Maharashtra & Another - Respondents
Writ Petition No. 2818 of 2012 with Notice of Motion [L] No. 214 of 2013
Decided On: 20-01-2015
Writ Petition challenging the orders passed by the authorities under the Maharashtra Sales Tax on the Transfer of Right to use any Goods for any Purposes Act, 1985 (the Act of 1985) and the Bombay Sales Tax Act, 1959 (BST Act) for levy and recovery of sales tax on the transfer of the right to use the trade mark and brand equity of the petitioner company. The petitioner contended that the agreements entered into with the subscribing companies were not covered by the Act of 1985 and that the Tribunal erred in dismissing the appeals filed by the petitioner against the assessment orders passed by the Sales Tax Officer.
Fact of the Case:
The petitioner, a company incorporated under the Companies Act, 1913, entered into agreements with various subscribing companies to protect, enforce, and enhance the image and goodwill of the TATA name and its brand equity. The agreements provided for various initiatives to be undertaken by the petitioner for protecting, enforcing, and enhancing the image and goodwill of TATA of the TATA name and its brand equity. The Sales Tax Officer issued notices for assessment for the years 1998-99, 1999-00, 2000-01, and 2001-02, and passed four orders of assessment. The petitioner filed appeals against these orders to the Deputy Commissioner of Sales Tax (Appeals), who passed orders dismissing the appeals. The petitioner then filed Second Appeals before the Maharashtra Sales Tax Tribunal, which also dismissed the appeals.
Finding of the Court:
The Court held that the transfer of the right to use the trade mark and brand equity of the petitioner company was covered by the Act of 1985 and that the Tribunal did not err in dismissing the appeals filed by the petitioner. The Court found that the agreements entered into between the petitioner and the subscribing companies envisaged the transfer of the right to use intangible goods, namely, the trade marks, and that such transfer was subject to tax under the Act of 1985. The Court also held that the Tribunal did not commit any error of law apparent on the face of record or act perversely in dismissing the petitioner's appeals.
Issues: 1. Whether the agreements entered into between the petitioner and the subscribing companies were covered by the Act of 1985? 2. Whether the Tribunal erred in dismissing the appeals filed by the petitioner against the assessment orders passed by the Sales Tax Officer?
Ratio Decidendi: 1. The Act of 1985 applies to 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. The term "goods" includes all kinds of movable property, not being newspapers, actionable claims, money, stocks, shares, or securities. 2. The agreements entered into between the petitioner and the subscribing companies envisaged the transfer of the right to use intangible goods, namely, the trade marks. Such transfer was subject to tax under the Act of 1985.
Final Decision: The Court dismissed the writ petition, holding that the Tribunal did not err in dismissing the petitioner's appeals and that the agreements entered into between the petitioner and the subscribing companies were covered by the Act of 1985.
(S.C. Dharmadhikari, J.)
1. By this Writ Petition under Article 226 of the Constitution of India, the petitioners are seeking the following reliefs :
(a) this Hon'ble Court be pleased to issue a writ of Certiorari or a writ in the nature of Certiorari or any other appropriate writ, order or direction;
(i) quashing and setting aside the said impugned orders being exhibits C1 to C4, D1 to D4, E hereto and K4-A, K4-B, K4-C, K4-D, K5-A, K5-B, K5-C, K6-A, K6-B and K6-C.”
(ii) quashing and setting aside the said Notices dated July 17, 2012 for recovery of the alleged sales tax dues for the period 1998-2002 being exhibits F1 to F4 hereto;
(iii) quashing and setting aside the said Orders dated August 9, 2012 for levy of interest and penalty in respect of the said alleged sales tax dues for the period 1998 – 2002 being exhibits G5 to G8 hereto;
(iv) quashing and setting aside the said Assessment Notices dated March 15, 2011 for levy of sales tax for the years 2002-2005 being exhibit H1 to H3 hereto;
(v) quashing and setting aside the said Notice dated 13th August, 2012 issued under Section 39 of the Bombay Sales Tax Act, 1959 by Respondent No.2 to the Branch Manager, Canara Bank, Fort Market Branch being Exhibit C8 hereto.
(b) this Hon'ble Court be pleased to issue a writ of Mandamus or a writ in the nature of Mandamus or any other appropriate writ, order or direction directing Respondent No.2 to refund to Petitioner No.1 an amount of Rs. 2,66,11,200/- being the total amount of part payment of sales tax paid in respect of the Assessment Order dated August 2, 2003 along with interest thereon at a rate which this Hon'ble Court deems fit;
2. At the outset Mr. Kumbhakoni, learned Senior Counsel appearing for the respondents invites our attention to the order passed by this Court on 5th February, 2014 and submits that though the Writ Petition is admitted the issue of its maintainability has been kept open.
3. The petitioners according to the respondents have an alternate and equally efficacious remedy of seeking reference under Section 61(1) of the Bombay Sales Tax Act, 1959. They have not availed of that remedy. Rather they availed of that remedy during the pendency of this Writ Petition, but, their application seeking a reference on certain questions of law for opinion and answer of this Court was dismissed by the Tribunal on 15th January, 2013 holding that it is barred by limitation. Mr. Kumbhakoni has submitted that the objection, therefore, can still be raised.
4. Mr. Kumbhakoni submits that the conduct of the petitioners is such that they should not be allowed to invoke this Court's equitable and discretionary jurisdiction. He relied upon the fact that Second Appeals were dismissed by the Tribunal on 7th June, 2012. The notices for recovery of tax were issued calling upon the petitioners as to why the recovery should not be effected with deferred penalty. Four orders were passed pursuant to this notice on 9th August, 2012 and Rs.7 Crores was the amount determined thereunder.
5. Mr. Kumbhakoni submits that the statutory period of limitation of ninety days is prescribed under Section 61 for making an application requesting the Tribunal to refer the questions of law for opinion and answer of this Court expired. However, on the very next day, namely, 14th September, 2012 a Writ Petition in this Court has been filed, namely, the present Writ Petition. On 2nd November, 2012, an order is passed in the present Petition wherein a statement is recorded that in view of availability of the alternate remedy the petitioners would invoke it within two weeks from the date of the order. The present Writ Petition was kept pending. Mr. Kumbhakoni, therefore, submits that the petitioners are accepting the fact that the remedy provided under Section 61 is not only alternate but equally efficacious and they deliberately did not invoke it earlier but availed of purportedly the same after the limitation for availing it had expired. This conduct of the petiti
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