The main legal point established in the judgment is that the transaction of sale of 'Anti Virus Software' is deemed to be a 'service' as per the definition of 'Information Technology Software' and the ISODA decision.

JUDGMENT :

(Prayer: in W.P.No.25923 of 2018: Writ Petition filed under Article 226 of the Constitution of India, praying to issue a Writ of Certiorari, calling for the records in Order in Original No.24 & 25 of 2018 dated 26.04.2018 passed by the respondent herein and to quash the same, insofar as the said impugned order has been passed in total violation to the principles of natural justice, without jurisdiction, contrary to the statutory provisions and in excess of the authority conferred on the said respondent. In W.P.No.31485 of 2018:

Writ Petition filed under Article 226 of the Constitution of India, praying to issue a Writ of Certiorari, calling for the records in Order in Original No.4 to 6 of 2018 (R) dated 24.05.2018 passed by the respondent herein and to quash the same, insofar as the said impugned order has been passed in total violation to the principles of natural justice, without jurisdiction, contrary to the statutory provisions and in excess of the authority conferred on the said respondent.)

1. With the consent of both parties, the present Writ Petitions are taken up and heard through Video Conferencing on 25.09.2020.

2. The petitioner, namely, K7 Computing Private Limited, is engaged in Software Development and Supporting Services. The petitioner develops Anti Virus Software in the name of 'K7 Total Security' and 'K7 Anti Virus', which is a software for Anti Virus protection, Antispyware protection, Email Scanner, Firewall and Privacy protection etc. The software is downloadable from the petitioner's website.

3. The demand of service tax of Rs.4,27,99,059/- payable for the period from July 2012 to March 2013 under Section 73(1) of the Finance Act, 1994 (hereinafter referred to as the 'Act') together with interest and penalty, is under challenge in this Writ Petition. The principal ground raised by the petitioner is that they do not provide any taxable service as defined under Section 65 (105) (zzzze) of the Act, i.e., 'Information Technology Software Service' and therefore, they are not mandated to register themselves with the Service Tax Department.

4. The learned counsel for the petitioner submitted that 'Anti Virus Software' do not fall within the ambit of taxable service, as defined under Section 65 (105) (zzzze) of the Act. It is also his contention that the petitioner has discharged VAT on the sale of Anti Virus Software, since it is deemed to be a 'sale of goods' and has been duly assessed by the authorities under the Tamil Nadu Value Added Tax Act over the statutory returns filed by them and therefore, the claim of the Department that the transactions rendered by the petitioner is amenable to service tax, cannot be substantiated.

5. Per contra, the learned Senior Standing counsel for the respondent, placed reliance on a Hon'ble Division Bench decision of the Madras High Court in the case of Infotech Software Dealers Association (ISODA) V. Union of India reported in 2010 (20) STR 289 (Mad) and submitted that the petitioner's Anti Virus Software is a representation of instructions recorded in a machine readable form that provides interactivity to the End User through a computer that has working internet connectivity and therefore, Anti Virus Software squarely falls within the definition of 'Information Technology Software'. By applying the principles laid down by the Madras High Court in ISODA (supra), the petitioner's software is deemed to be a 'service' and therefore the Department was justified in demanding the service tax for the relevant period.

6. The primary issue that arises for consideration in the present cases is as to whether, an 'Anti Virus Software' would fall within the ambit of the definition of 'Information Technology Software' as defined under Section 65 (53a) of the Finance Act, 1994?

7. The Hon'ble Division Bench of the Madras High Court in ISODA (supra) has held that when the developer of a software retains his copyright and transfers the network subscriber the right to use the software, by