Page 74 - GSTL_3rd September 2020_Vol 40_Part 1

8 GST LAW TIMES [ Vol. 40
vices (supra) before the Andhra Pradesh, High Court. He relies upon paragraph
Nos. 7, 36, 37 and 40 of the judgment, which are extracted hereunder :
“7. The Learned Special Government Pleader for Taxes, contends that the
questions raised in the writ petition are only academic questions and there-
fore the writ petition is liable to be dismissed. He further contends that the
various software packages like FOXPRO, WORDSTAR, WINGS, LOTUS,
DBASE, WINDOWS, MS-DOS, UNIX, etc., are “goods” known in the mar-
ket and therefore they have been correctly described in the instructions as
liable to tax. In other words the contention of the learned Government
Pleader is that the turnover relating to sale of “branded software” will be
the turnover relating to sale of “goods” and therefore exigible to sales tax.
However, insofar as unbranded software is concerned, the learned Gov-
ernment Pleader conceded that as it related to skill and labour so it might
not be falling within the meaning of “goods”.
36. As our discussion is confined to branded software, as it is called here,
of which American equivalent is “computer software off the shelf”, we do
not consider it appropriate to embark upon discussion on the question of
the nature of “unbranded software” which is also termed as software “tai-
lor-made to the customer's particular requirements”.
37. In the light of the above discussion, we have no hesitation in conclud-
ing that the branded software can safely be treated as falling within the
ambit of “goods” under the APGST Act.
40. Insofar as the computer software is concerned, we have already men-
tioned above two categories of software, viz., (i) the branded software and
(ii) unbranded software. Whereas the first type of software falls within the
meaning of “goods”, the second type of software, viz., unbranded software
cannot be treated as “goods”. Therefore, it would not only be inappropriate
but also incorrect to state that intellectual property does not fall within the
ambit of “goods”. In our view a correct statement would be that all intellec-
tual properties may not be “goods” and therefore branded software with
which we are concerned here cannot be said to fall outside the purview of
“goods” merely because it is intellectual property; so far as “unbranded
software” is concerned, it is undoubtedly intellectual property but it may
perhaps be outside the ambit of “goods”. However, we consider it unneces-
sary to discuss its various aspects and express any opinion in that regard.
We are, therefore, unable to accept the contention that merely because
software is “intellectual property” it cannot be treated as “goods” as being
too broad a statement.”
18. He further relied upon the 2005 judgment of the revisionist-
Company in Tata Consultancy Services (supra), which was challenged before the
Apex Court against the order of Andhra Pradesh High Court. Relevant para-
graph Nos. 2, 3, 5, 27 and 29 of the said judgments reads as under :
“2. Briefly stated the facts are as follows :
The Appellants provide consultancy services including Computer
Consultancy Services. As part of their business they prepare and
load on customers’ computers custom made software (for sake of
convenience hereinafter referred to as ‘uncanned software’) and al-
so sell Computer Software Packages off the shelf (hereinafter re-
ferred to as “canned software”). The canned Software Packages are
of the ownership of companies/persons, who have developed those
software. The Appellants are licensees with permission to sub-
license these packages to others. The canned software programmes
are programmes like Oracle, Lotus, Master Key, N-Export, Uni-
graphics, etc.

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