G.S. Patel, J.

I. INTRODUCTION

1. These two Writ Petitions came to be tagged together presumably because they both raise issues of whether, in respect of the transactions that arise in each, the Petitioners are liable to a levy of service tax or sales tax. As it turns out, the facts are materially distinct; and as the following judgment shows, the two cases seem to us to be mirror images of each other: if one fails, on a parity of reasoning, the other must succeed.

2. We have heard Mr. Venkatraman for the Petitioners, Mr. Sonpal for Respondents Nos. 2 and 4, and Mr. Jetly for Respondent Nos. 1 and 3 in Writ Petition No. 9175 of 2015 (“the Monsanto Petition”). In Writ Petition No. 497 of 2015 (“the Subway Petition”), we have heard Mr. Shroff for the Petitioners, Mr. Jetly for Respondents Nos. 2 and 3 and Mr. Sonpal for Respondent Nos. 1 and 4. We have carefully considered the submissions of all the counsels and the material they have placed before us. Mr. Jetly has broadly adopted the arguments of Mr. Venkatraman and Mr. Shroff.

3. Mr. Venkatraman’s submissions are intricately structured. We will turn to these presently. It seems to us necessary, however, to at least attempt to distill the essence of the arguments in his Petition and, therefore, in the companion Petition. In doing so, we leave aside for the present all questions of legislative competence.

(a) If we may be permitted a small latitude, the kernel (or ‘seed’, as it were) of Mr. Venkatraman’s case is this: Mahyco Monsanto Biotech (India) Pvt. Ltd. (“Monsanto India”) supplies to third parties a certain type of hybrid cotton seed. This seed is impregnated with a proprietary technology that protects it against the boll-weevil, a known menace to cotton crops. From those hybrid seeds, these third parties then generate large quantities of sowable seeds, which they then sell to cotton farmers. Monsanto India itself sells nothing to the end-user. These end-product seeds have the benefit of the boll-weevil protection technology; and the third party purchasers from Monsanto India are thus able to commercialize the technology to produce hybrid seeds for sale to cotton growers. From a small seed do mighty cotton plantations grow. Monsanto India says that what it provides when it gives the third party purchasers the parent, impregnated seed is a service, and this is liable to be taxed under the relevant provisions of the Finance Act as amended, read with the Rules that pertain to service tax. This is a central levy. The transaction between Monsanto India and the third party with whom it deals is not, and cannot be, a sale assessable under the Maharashtra Value Added Tax Act, 2002 (“the MVAT Act”). Mr. Venkatraman insists that the transaction in question involves no transfer of a chattel qua chattel; no transfer of the right to use; and therefore, by necessary elimination, it must be a service and must be construed as such. He says that what is being offered is the technology; the container, receptacle or form in which it is transmitted is entirely irrelevant. What the third party pays for is the technology, not the container; and since this has none of the qualities that define a sale or a deemed sale (viz., a transfer of the right to use), it must be held to be a service. Central to this argument is the aspect of non-exclusivity: Monsanto India passes no ‘property’ or ‘estate’ in the technology itself to the third party developer. It merely licenses it. Monsanto India may issue innumerable such technology licenses to various third party developers. Those developers in turn cannot further sub-license the technology. They can only use it to produce a hybrid, sowable seed. Therefore, the third party developers obtain only a right to use the technology; and there is no transfer of that right. The argument against this seems to us to be straightforward: that the only way fo