Page 71 - GSTL_3rd September 2020_Vol 40_Part 1

2020 ] TATA CONSULTANCY SERVICES v. COMMISSIONER OF TRADE TAX, U.P. 5
CASES CITED
Raza Textile Limited v. Commissioner of Sales Tax
— 1973 SCC OnLine All 479 — Referred ............................................................................ [Paras 16, 29]
Sasken Communication Technologies Ltd. v. Joint Commissioner of Commercial Taxes
— 2011 (33) STT 507 — Distinguished ...................................................... [Paras 16, 19, 21, 34, 35, 41]
Tata Consultancy Services v. State of Andhra Pradesh
— 2004 (178) E.L.T. 22 (S.C.) — Referred .................................................... [Paras 16, 18, 20, 25, 32, 35]
Tata Consultancy Services v. State of Andhra Pradesh
— 1996 SCC OnLine AP 1260 — Referred ................................ [Paras 10, 16, 17, 18, 20, 28, 32, 35, 40]
Virendra Kumar Trading Co. v. Commissioner of Commercial Tax
— 2017 (100) VST 192 (All) — Referred ....................................................................................... [Para 29]
[Order]. - Heard Sri Tarun Gulati along with Sri Kunal Kishore and Ms.
Pooja Talwar, Learned Counsel for revisionist and Sri B.K. Pandey, Learned
Standing Counsel for respondent.
2. Revisionist is a Company incorporated under the Companies Act,
having its units in Uttar Pradesh at Noida and Lucknow. It is registered both un-
der the U.P. Trade Tax Act as well as Central Sales Tax Act. Dispute is in regard
to Assessment Year 2001-02 (U.P.). According to revisionist, it is engaged in the
business of software development and rendering support services. According to
revisionist its software business is divided in two parts, one which deals with
standard software packages, which are sold off the shelf, and the other type of
product in which the Company is mainly involved is software development as
per client specifications and rendering support work for its client (software con-
sultancy). According to revisionist, Noida unit, which is registered with Software
Technology Park of India (known as “STP”) renders only the software services to
overseas client while Lucknow unit has two distinct locations known as Luck-
now STP and Lucknow non-STP. The STP location works on similar basis as
Noida unit providing only software services to overseas clients, while non-STP
location caters to domestic client by providing specific application software de-
velopment and support services generally known as software consultancy ser-
vices.
3. According to revisionist, computer software sold off the shelf also
called as branded software, trade tax was charged and the same was deposited
with the Department and the customer can use the licensed standard software as
it is. As far as the agreement entered by the assessee with various clients for de-
veloping application software strictly on the basis of the specific needs of a par-
ticular client, the intellectual rights in so developed software solution vested with
the client.
4. According to revisionist-assessee, the branded software comes under
the definition of goods. Section 2(d) of the U.P. Trade Tax Act (hereinafter called
as an “Act”) defines as under :
2. (d) “Goods” means every kind or class of movable property and in-
cludes all materials, commodities and articles involved in the execution of a
works contract, and growing crops, grass, trees and things attached to, or
fastened to anything permanently attached to the earth which, under the
contract of sale, are agreed to severed, but does not include actionable
claims, stocks, shares, securities or postal stationery sold by the Postal De-
partment;”
5. While unbranded software, which is developed according to the
specification of the client also known as unbranded software or software, tailor
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