SUN DIRECT TV. PVT. LTD. Vs. STATE OF TRIPURA

JUDGEMENT

(1.) Petitioner is a company registered under Companies Act and is engaged in the business of providing Direct to Home broadcasting services (DTH service, for short). It has operations in the State of Tripura. In order to provide such services to the customers, the petitioner provides free of cost certain equipments such as, Set Top Box, Smart Card, Low Noise Booster, Antenna, Cable, Connector, Clip & tie etc. described under one umbrella expression of 'Customer Premises Equipments' (CPE, for short). Petitioner contends that for providing such equipments no charge is collected from the subscriber. The petitioner continues to be the owner of the goods. Under the circumstances, according to the petitioner, the State authorities cannot collect value added tax on such equipments.

(2.) The State authorities, however, hold a different belief. According to the VAT authorities of the State Government the petitioner is liable to pay VAT at the prescribed rates. On such basis, the Assessing Officer issued notice to the petitioner for collecting unpaid VAT for the period of years 2009-10 to 2013-14. After receiving response from the petitioner, the Assessing Officer passed a common order of assessment on 23.03.2015 for the entire period noted above. He was of the opinion that the dealer was liable to pay VAT at the appropriate rates of 4% or 6%, as the case may be on the value of such goods. He also imposed penalty to the extent of 10% of the duty which remained unpaid. The said order eventually became the subject matter of a revision petition before the Commissioner of Taxes as a revisional authority. By the impugned order dated 07.03.2019 the revision petitions were dismissed. The revisional authority also confirmed the imposition of penalty on the petitioner. He was of the opinion that though there may not be sale of goods in question from the petitioner to the subscribers, nevertheless right to use the goods was transferred in favour of the subscribers. The revisional authority heavily relied on the decision of this Court in case of Bharti Telemedia Ltd. v. The State of Tripura and another dated 19.02.2015 in WP(C) No.563 of 2010 and connected petitions. For confirming the penalty the revisional authority recorded that the penalty was imposed after affording reasonable opportunity to the petitioner.

(3.) We have heard learned counsel for the parties. We notice that the issues involved in the present petition are squarely covered by the decision of Division Bench of this Court in case of Bharti Telemedia Ltd. (supra). The question involved in the said petition was with respect to inviting value added tax on the goods provided by a DTH provider to its customer so that the customer could enjoy such service. It is also a case where concededly there was no sale of goods. Nevertheless the High Court referring to the decision of Supreme Court in case of Bharat Sanchar Nigam Ltd. and another v. Union of India and others reported in (2006) 3 SCC 1 invoked the principle of transfer of right to use the goods. In a detailed judgment it was observed as under: