1. The State in this revision questions the order of the Kerala Sales Tax Appellate Tribunal wherein it was found that the transaction between the assessee and Doordarshan in respect of 13 episodes of television serial entitled “Mohapashikal” was not a sale and it was only a contract for work.

2. The turnover of the assessee, Malayala Manorama Co. Ltd. for the assessment year 1993-94, included a receipt of Rs. 13,00,000/- as sale consideration for sale of Manorama Vision Software to Doordarshan. However, the assessee raised a question that the receipts for sale of software to Doordarshan is not assessable as sale, as the consideration received was for the works contract undertaken by them. The assessing authority overruled the objection and assessed the above receipt as sale consideration in the assessment order dated 24.11.1997. The Deputy Commissioner also affirmed the order of the assessing authority in its appellate order dated 5.12.1998. The assessee then filed a further appeal before the Sales Tax Appellate Tribunal contending that the assessee was only offering its service to produce a 13 episode serial and therefore, there was no sale by the assessee. The tribunal after evaluating the nature of the transaction, took the view that the assessee had only offered its service to produce the serial and the assessee had no right over the film or any part thereof by virtue of the agreement to attract transfer of property. Thus, the appeal filed by the assessee was allowed by the tribunal.

3. The question is whether the transaction referred in the contract to make a serial and transferring the right over the serial would attract the definition of the term “goods” occurring in the Kerala General Sales Tax Act, 1963 (hereinafter referred to as the “KGST Act”).

4. The issue involved in this case is an appreciation of the terms of a contract for the purpose of ascertaining whether it constitutes a contract of sale or contract of work in the light of the definition of “goods” under the KGST Act. The question whether making a serial for valid consideration amounts to sale of goods or not, is more or less settled by a large number of decisions of the Apex Court and of this court. It is settled now that “goods” would include all kinds of movable and immovable property whether it be tangible or intangible. The Hon’ble Supreme Court in Tata Consultancy Services vs. State of A.P. (2005) 1 SCC 308, has held as follows:

“...Thus a transaction/sale of computer software is clearly a sale of “goods” within the meaning of the term as defined in the said Act. The term “all materials, articles and commodities” includes both tangible and intangible/incorporeal property which is capable of abstraction, consumption and use and which can be transmitted, transferred, delivered, stored, possessed, etc. The software programs have all these attributes.”

The answer to the question involved in this case would depend upon answering the point whether the agreement is a mere contract for work and labour or contract for sale of goods.

5. The agreement was entered on 4.3.1994 between the assessee and Doordarshan. By the said agreement, the assessee was directed to produce a 13 episode serial entitled “Mohapashikal”. The assessee had to carryout the entire production work. It was agreed that the assessee will have to write the script, shoot, direct, produce, edit and complete the serial in all respects. Thus, the entire creation of the work was rested on the assessee. It was reserved in the agreement that the approving authority (Doordarshan) will have full authority and liberty to reject any or all of the materials or workmanship. It was also agreed that the Government will not be liable to pay any amount to the assessee towards expenses incurred or service rendered in the event the approving authority is dissatisfied with the making of the serial. It is further agreed that upon delivery of the serial and materials to the Government, the same will become the a