At, High Court of Kerala
By, THE HONOURABLE MR. JUSTICE ANTONY DOMINIC & THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU
For the Petitioner: Sobha Annamma Eapen, Sr. Govt Pleader. For the Respondnets: P.T. Usha Road, R1, S.K. Devi, M. Raj Mohan, Santhosh P. Abraham, Advocates.
Antony Dominic, J.
1. These revisions are filed by the Revenue challenging the common order passed by the Kerala Value Added Tax Appellate Tribunal, Ernakulam in TA VAT.No.307/14 and 308/14 respectively. Briefly stated, the case as disclosed in the records show that during the assessment years 2010-11 and 2011-12, the respondent, a registered dealer, had effected sale of software (IT products). After the assessment was completed, an audit visit was conducted by the Commercial Tax Officer under section 23 of the KVAT Act. On inspection of the books of records, it was found that the assessee had received certain amounts towards customization charges which was not included in the return filed by them. Treating the customization charges thus received by the assessee as part of its turn over, proceedings were initiated by issuing a pre-assessment notice. The assessee contended that the customization charges received by it were not part of sale consideration but was received for the service rendered by it after the sale of the softwares in question. However, rejecting the said contention, the Assessing Officer completed the assessment. Though the order was confirmed in appeal, the first appellate authority reduced the addition made. The assessee challenged the order before the Tribunal and the Tribunal set aside the impugned orders. It is in this background, the revision petitions are filed.
2. We heard learned Government Pleader and the counsel appearing for the assessee.
3. The short question that is required to be considered for the disposal of these revision petitions is whether the view taken by the Tribunal that the customization charges received by the assessee are not part of the turn over is legal or not. Having bestowed our attention to the contentions raised, we find that admittedly, customization charges to the software products sold by the assessee was received by the assessee after the sale was completed. The sale proceeds received by the assessee was also declared in the return filed by it. It is also admitted that for the customization charges received, the assessee had paid service tax. 'Sale price' has been defined to mean the valuable consideration received or receivable by a dealer for the sale of any goods less any sum allowed as cash discount, according to the practice normally prevailing in the trade, but inclusive of any sum charged for anything done by the dealer in respect of the goods or services at the time of or before delivery thereof, excise duty, special excise duty or any other duty or taxes except the tax imposed in the KVAT Act. The customization charges are admittedly received by the assessee after the delivery of the goods to the customer. This, therefore, means that the levy of customization charges does not satisfy the requirements of the Act to classify it as part of sale price. If that be so, customization charges could not have formed part of the sale consideration of the assessee and for its non inclusion in its return, the assessee could not have been faulted. We find no reason to interfere with the impugned order. Revisions fail and are accordingly dismissed.
4. Learned Government Pleader c
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ontended that the question whether in the process of customization, any goods have been transferred to qualify it to be a case of works contract requires to be examined. However, we find that such a question was not raised or considered by anyone of the authorities and therefore, at this revisional stage, that question cannot be considered.