THE HON’BLE SRI JUSTICE T. VINOD KUMAR AND THE HON’BLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO TREVC Nos.10, 11, 12, 14 and 26 of 2019 and 45 of 2022 COMMON ORDER: (per the Hon’ble Sri Justice T.Vinod Kumar)

Since all these Tax Revision Cases arise out of the common order dt.29.01.2018 passed by the Telangana Value Added Tax Appellate Tribunal, Hyderabad (for short, ‘the Tribunal’) in TA.Nos.489 to 495 of 2011 and 107 of 2012, and the assessee being one and the same, all the revision cases are being disposed of by this common order.

2. The Revenue-State is the petitioner in all the revision cases filed being aggrieved by the order of the Tribunal, whereby the Tribunal following its order rendered in earlier years 2002-03 to 2004-05 under the Andhra Pradesh General Sales Tax Act, 2005 (for short, ‘the APGST Act’) and years 2005-06 in T.A.Nos.888, 889, 890 and 891 of 2008 by order dt.25.04.2017, had held that supply of items, such as utensils, sofas, chairs, wash basins etc., by the petitioner therein to its customers does not constitute “transfer of right to use”, so as to bring them under the ambit of taxation under Section 5E of the APGST Act or under Section 4(8)

of the Telangana Value Added Tax Act (for short, ‘the VAT Act’).

3. In the present revision, the assessment years involved are 2006-07 – tax and 2007-08, 2008-09 and 2009-10 – penalty proceedings of the concerned years as detailed in the table below:

Sl.No. TREVC No. T.A.No. Assessment Year Nature of levy

1. 10/99 491/11 2007-08 Tax

2. 11/19 494/11 2008-09 Penalty 3. 12/99 107/12 2009-10 Penalty

4. 14/19 493/11 2008-09 Tax

5. 26/19 490/11 2006-07 Penalty 6. 45/19 492/11 2007-08 Penalty

4. Heard learned Standing Counsel appearing for Commercial Taxes for the petitioner-State and learned counsel appearing on behalf of the respondent-assessee in all these revisions and perused the record.

5. The facts in all the cases are the respondent-assessee is engaged in the business of supply of items, such as furniture, carpets, tables, pandals, utensils, chairs, sofas and wash basins etc., to customers for use by them in functions organized/celebrated by them; and that the premises of the respondent-assessee was inspected by the officials of Regional Vigilance & Enforcement Officer on 24.05.2007, who during such visit/inspection noted that the supply of above goods by the respondent-assessee for a specific period and receipt of hire charges from its customers would be liable to tax under Section 4(8) of the VAT Act, for the aforesaid period.

The Assessing Authority, by rejecting the claim of the respondent- assessee that there is no transfer of effective control over these goods and as such receipt of hire charges by it would not be exigible to tax under the provisions of the VAT Act, had held that hiring of the aforesaid items to its customers would amount to “transfer of right to use goods”

and accordingly, subjected hire charge receipts to tax.

6. The Assessing Authority in addition to levying tax on hire charges by holding that there was “transfer of right to use” in items supplied by the respondent-assessee also invoked the provisions of Section 53(3) of the VAT Act, and levied penalty for under-declaration of tax.

7. Aggrieved by the aforesaid order of the Assessing Authority in subjecting the turnover of the respondent-assessee relating to hire charges to tax under the provisions of Section 4(8) of the VAT Act, the respondent–assessee had filed appeals before the First Appellate Authority i.e. Appellate Deputy Commissioner (CT), Punjagutta Division, Hyderabad, who by dismissing the appeals, however, had upheld the levy as well as the penalty by holding that it was a case of willful neglect on the part of the respondent-assessee in not showing the correct turnovers in the returns.

8. Aggrieved by the aforesaid order of the First Appellate Authority, the respondent–assessee had filed separate appeals before the Tribunal.

9. The Tribunal by considering the appeals filed by the respondent- ass