Page 73 - GSTL_3rd September 2020_Vol 40_Part 1

2020 ] TATA CONSULTANCY SERVICES v. COMMISSIONER OF TRADE TAX, U.P. 7
account of fees for annual technical support. It was also contended that licensed
products sold were shown under the taxable sale and tax was paid. Lastly, it was
stated that any further details or clarification so required by the Department
would be provided.
11. The assessing authority passed assessment order under Section
41(8) of the Act, accepted the books of accounts, but rejected the claim of assessee
in regard to billing for software development being treated as consultancy ser-
vice charges and imposed a tax of Rs. 19,84,184/- on the receipt of Rs.
4,96,04,597/- as a tax on sale of software.
12. Aggrieved by this order the assessee-company filed an appeal be-
fore the Joint Commissioner (Appeals), Trade Tax, Noida. An application was
also filed for addition of grounds in the appeal. In the said application it was
stated that the assessee had sold computer hardware to PWD, U.P. for Rs.
1,40,54,040/- and had raised bills, further under Section 3A of the Act, the sale of
computer hardware is exempted from tax. It was stated that due to clerical mis-
take the appellant showed the aforesaid sale of computer hardware as computer
consultancy services. Another ground taken was that during relevant year the
assessee received Rs. 14,58,380/- against annual maintenance contract, but the
assessing authority had wrongly imposed tax on the appellant assuming it to be
the sale of computer software.
13. The assessee relied upon various judgments of this Court in sup-
port of his contention that new plea could be raised before the appellate authori-
ty in appeal, which was not raised before the assessing authority.
14. By order dated 23-3-2005, the appellate authority upheld the as-
sessment order and rejected the appeal of the revisionist. It was further held that
additional ground so taken by the assessee amounts to contradiction and the
same could not be permitted to be added at this stage and rejected the applica-
tion for the addition of additional grounds. Aggrieved by the said order, the re-
visionist-assessee preferred an appeal before Trade Tax Tribunal, Noida which
was rejected by order dated 19-6-2006.
15. Sri Tarun Gulati Learned Counsel for the revisionist-assessee sub-
mits that the taxing authorities completely failed to distinguish between the
branded and unbranded software. According to him, the software sold off the
shelf, which is covered by branded item, come under the definition of goods as
defined in Section 2(d) of the Act, for which the tax has been deposited by the
Company. As far as the software developed and the support services given by
the Company to its client falls under the category of unbranded software, which
is also termed as software “tailor made to the customer particular requirement”,
which is a service rendered to the client and does not fall within the definition of
goods and not amenable to tax.
16. Sri Gulati has relied upon the judgment of the Apex Court in the
case of revisionist-Company itself, i.e., Tata Consultancy Services v. State of Andhra
Pradesh, (2005) 1 SCC 308 = 2004 (178) E.L.T. 22 (S.C.), Tata Consultancy Services v.
State of Andhra Pradesh, 1996 SCC OnLine AP 1260, Sasken Communication Technol-
ogies Ltd. v. Joint Commissioner of Commercial Taxes (Appeals)-3, Banglore, 2011 (33)
STT 507 and Raza Textile Limited, Rampur v. Commissioner of Sales Tax, U.P., Luck-
now, 1973 SCC OnLine All 479.
17. According to him, matter of the revisionist-Company in regard to
branded software was under consideration in the case of Tata Consultancy Ser-
GST LAW TIMES  3rd September 2020  89