IMPORTANT POINTS
The advertisements so displayed on the hoardings is exclusively that of the second party and obligation is on the first party “to keep the hoardings to look after and effect periodical maintenance of its advertisement of the hoarding during the period of the agreement” (sic). In such circumstances, Drisya Advertising, the appellant in OTA 3/2018, by the agreements do not effect any transfer of right to use. The mere fact that the advertisement of a third party is displayed on the hoarding does not warrant a finding of transfer of right to use the hoardings. It is an activity similar to that of a wall painting where the concept and idea is by the party which advertises its business. The flex board with the advertisement is supplied by the 3rd party which is mounted on the hoarding and maintained during the period of the agreement, by the assessee.

JUDGMENT :

K. VINOD CHANDRAN, J.

1. The other tax appeal is from an order under section 94 (7) of the Kerala Value Added Tax Act, 2003 (for short "KVAT Act") and the writ appeal from the judgment of a learned Single Judge which followed the decision of a Division Bench of this Court. The issue raised is identical and the appellants before us seek to distinguish on facts the transaction which was the subject matter of the Division Bench decision in Delta Communications vs. State of Kerala, (2016) 24 KTR 139 (Ker).

2. Sri. Harisankar V. Menon, the learned Counsel appearing for the appellant would submit that the transaction of the appellants/assessees is quiet distinguishable on facts from the transaction as seen from the reported judgment. Though the business carried on by the revision petitioner in the reported judgment and the aseessees are display of advertisements of third parties on hoardings erected by the assessees in leased out properties; the manner in which it is done is quiet distinct. The assessees do not at anytime transfer the right to use the hoardings. The hoardings are always in the possession and custody of the assessee's themselves. The agreement with the third parties is only for display of their advertisements in the hoardings erected by the assessee, the maintenance of which during the period of agreement is also carried on by the assessees. There is hence no transfer of right to use; is the specific contention taken. The learned Counsel also has a contention that the decision in Delta Communications is wrongly decided.

3. Sri. Mohammed Rafiq, learned Senior Government Pleader on the other hand would contend that insofar as the appellant in W.A No. 852/2018 is concerned, the issue stands covered inter partes as per Ext.P11 judgment in W.P. (C) No. 40312/2016 and connected cases. The appellants contention therein was with respect to the clarification issued under Section 94 of the KVAT Act, which application was moved by the appellant in OTA No. 3/2018. The said clarification stood cancelled based on which a Division Bench on a reference made had found the specific transaction of M/s. Vismaya Advertising to be covered by the decision in Delta Communications. It is pointed out that both Delta Communications and Ext.P11 are challenged before the Honourable Supreme Court which SLPs have also been converted as Civil Appeals. M/s. Vismaya Advertising, the appellant in W.A. No. 852/2018 who was also the petitioner in W.P. (C) No. 40312/2016 did not choose to challenge Ext.P11 judgment.

4. In any event, it is argued relying on the judgment of the Honourable Supreme Court reported in Khoday Distilleries Ltd. vs. Sri. Mahadeshwara Sahakara Sakkare Karkhane Ltd. (2019) 4 SCC 376 that there could be no reference to a larger Bench as argued by the learned Counsel for the appellants. It is asserted that there is transfer of right to use since the hoardings unlike buildings can be detached from the land or from the buildings on which they are erected without demolition of the same as has been held in Delta Communications. It has the character of goods and merely by reason of it being embedded to an immovable property, such character is not lost when the advertisement of a third-party is displayed on the hoardings and there is a transfer of right to use. On merits it is urged that even in cases where the goods are transferred with the employees of the owner/hirer in control, the Hon'ble Supreme Court has held that there is a transfer of right to use goods. Great Eastern Shipping Co. Ltd. vs. State of Karnataka, (2020) 3 SCC 354 departs substantially and considerably from the earlier decisions is the forceful submission.

5. The appellant in W.A No. 852/2018 points out that the clarification relied on in Ext.P11 judgment was set aside in Ext.P12. There is no finding on merits, as to the reasoning in the order dated 03.07.2017, relied on in Ext.P11 judgment. The order relied on by the Division Bench has been found to be nonest and