A.S.Venkatachalamoorthy, J.: The petitioner seeks for issuance of a writ of certiorarified mandamus to call for the records of the first respondent in T.C.(A) No.3709 of 1997, quash the impugned order dated 9.2.2001 and to direct the 3rd respondent, his agents or subordinates not to impose sales tax on the receipts of Royalty received by the petitioner.

2. The petitioner/assessee, during the assessment year 1987-1988, allowed one Tvl.Muthu Agencies, Madurai, to use their trade-mark and for which the petitioner received a sum of Rs.7,26,835. In the books of accounts, this amount is shown as Royalty received. In the original assessment, the turnover relating to this transaction was exempted, accepting the claim that it was only a Royalty. Subsequently, the Assessing Authority, took the view that the said consideration was received for a transfer of right to use the trade-mark and hence, the same is taxable. The Assessing Authority issued a Notice as contemplated under law to the assessee to file his objections before revising the assessment, but however, the assessee did not respond. Thereupon, the Assessing Authority viz., the Deputy Commercial Tax Officer, proceeded on the basis that there was a transfer of incorporeal goods, which is taxable under the Sales Tax Act and consequently, passed orders of revised assessment, holding that the sale consideration of Rs.7,26,835 received by the assessee was taxable at 5% and levied tax. The assessee preferred an appeal before the Appellate Assistant Commissioner, who accepted the claim of the assessee that the amount received was only a Royalty which could not be called as sale consideration and held that the reassessment was not proper. The Joint Commissioner took up the matter under his purview in suo motu revision and, placing reliance on a ruling reported in H.Anraj v. Government of Tamil Nadu, 61 S.T.C.P. 165, held that the transfer of trade-mark right is a sale of incorporeal goods for consideration and therefore, the amount received is taxable under the TNGST Act. The aggrieved petitioner/assessee preferred T.C.(A) No.3709 of 1997 before the Tamil Nadu Taxation Special Tribunal, Chennai. The said Tribunal, after duly considering the matter, dismissed the appeal, with a direction to the Assessing Authority to give effect to the order for assessment under Sec.3-A of the Tamil Nadu General Sales Tax Act, 1959.

3. Learned counsel for the petitioner contended that the transaction will not amount to sale. Or in other words, there was no transfer of a right to use the trademark for consideration and, in fact, Tvl.Muthu Agencies was given a mere right to enjoy the trade-mark for a period, and in those circumstances, it can only be said that the petitioner/assessee received the amount only towards Royalty and hence, the said amount should have been exempted while calculating the turnover.

4. On the other hand, learned counsel, appearing for the Revenue, submitted that the transaction is a sale of incorporeal goods. Or in other words, there was a transfer of right to use the trade-mark and hence the consideration received in that regard is taxable and that the authorities below have rightly decided the matter.

5. Before this Court refers to the various rulings cited by both sides, for a better appreciation, it is but necessary that the relevant clauses in the terms of agreement dated 1.4.1987, between the writ petitioner/assessee and M/s.Muthu Agencies, are set out. The following are some of the conditions found in the said agreement:

"(1) Licensor on the request of the licensee hereby grants to the licensee the permission to affix the trade marks in the course of trade to respective goods to be bought and re-packed by them for sale.

(2) The licensee hereby agrees to pay the licensor towards royalty for the permission granted to use the Trade Mark in the course of trade at the rate of 8 paise per packet of Gopal Tooth Powder 15/20 grams. 5 paise for Anjol Aluppu Marundhu 2 grams and 3 paise f

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