ICICI LIMITED Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) T .A. No. 583/00 relates to the assessment year 1995 -96 and T.A. No. 584/00 relates to the assessment year 1997 -98. A common issue is involved in both the appeals filed by the same appellant M/s. ICICI Limited, Mumbai. The orders appealed against are also of the same Appellate Deputy Commissioner (CT), Punjagutta Division, Hyderabad. In view of the above, a common order is being passed for both the appeals. The appellant preferred appeals before the Appellate Deputy Commissioner, Punjagutta Division, Hyderabad, disputing the tax liability on a turnover of Rs. 7,44,81,960/ - for the year 1995 -96 and tax liability on a turnover of Rs. 60,80,130/ - for the year 1997 -98. This turnover relates to lease rentals received/receivable on the lease of equipment leased to lessees within the State and used by them within the State. This turnover had been taxed by the assessing authority as per Sec. 5E(b) of the APGST Act, 1957. The appellate authority dismissed the appeals of the appellant and upheld the orders of the assessing authority.

(2.) AT the time of hearing, the appellant has argued the case relying mainly on the order of the Hon'ble Supreme Court of India in the case of 20th Century Finance Corporation Limited and another vs. State of Maharashtra and other writ petitions and appeals pertaining to other States on an identical issue. The judgment was delivered by the Apex Court on 09.05.2000 and was reported in : (2000) 119 STC 182. The appellant has submitted that by virtue of this judgment, the Hon'ble Apex Court has in unequivocal terms stated that the locus of deemed sale is the place where the right to use the goods is transferred, and where the goods are when the right to use them is transferred is of no relevance to the locus of the deemed sale. Also of no relevance to the deemed sale is where the goods are delivered for use pursuant to the transfer of the right to use them. The appellant has produced before us copies of a few lease agreements entered into by M/s. ICICI Limited with a few of their lessees. The appellant has stated that these agreements are a sample of the type of lease deeds which the appellant is signing with its lessees and are representative of such transactions which the appellant has entered into for the assessment years 1995 -96 as well as 1997 -98. According to the appellants counsel as can be seen from all these lease agreements these have been signed by the appellant outside the State of Andhra Pradesh and therefore the situs of sale cannot be deemed to be the State of Andhra Pradesh. According to the counsel, under such circumstances, in view of the Hon'ble Supreme Court's judgment in the case of 20th Century Finance Corporation Limited and Another vs. State of Maharashtra, the sub -section (b) of Sec. 5E of APGST Act, 1957 is to be read down. According to the counsel, the ratio of the judgment of the Hon'ble Apex Court is squarely applicable to their case and therefore he has prayed for setting aside the orders of the Appellate Deputy Commissioner for both the assessment years.

(3.) THE question that comes up for our consideration therefore, is whether in the present case lease rentals received/receivable by M/s. ICICI Limited can be taxed U/s. 5E of the APGST Act, 1957 or not ?