THE STATE OF KARNATAKA Vs. UNITED BREWERIES LTD.

JUDGEMENT

(1.) THESE revision petitions are filed by the State of Karnataka, challenging the order dated 17 -01 -2014 passed by the Karnataka Appellate Tribunal in STA Nos. 2456 and 2457 of 2012 and Cross Appeal in STA Nos. 1142 and 1143 of 2013 whereby, the respondent -assessee has been exempted from payment of tax for the assessment years 2003 -04 and 2004 -05.

(2.) BRIEFLY the facts relevant for the purpose of this case are:

(3.) UNDER the Brewing and Distribution Agreement entered into between the assessee and the CBUs, the brewing and bottling of the beer was to be done as per the specifications given by the assessee, and by using the trade marks, names and logos of the assessee, made available by it to the CBUs. The entire production, as well as the trade mark, etc., belonged to the assessee and not to the CBUs. The right to use the know -how was given to the CBUs on non -assignable, non -transferable and non -exclusive basis. However, the right to market, sell, distribute and package the beer, according to the know -how and specifications prescribed by the assessee, was to remain under the supervision and control of the assessee, as per a registered user right. Under the agreement, it was specifically provided that the CBUs shall sell the entire beer manufactured in their jurisdiction to the assessee or its indentors. The agreement also provided that any liability attributable to the CBUs on bulk beer up to the Bright Beer tanks (BBT), was to be of the assessee. Thus, according to the agreement with regard to beer, the CBUs neither had any right over the product, nor did they have any right to sell or exploit the beer so produced, nor fix any price of the produce. It all belonged to the assessee.