Case Law Details
Nayana Premji Savala Vs Union of India (Bombay High Court)
Bombay High Court held that sub-leasing of containers by original lessee to another lessee wherein, possession and control is transferred, the same amount to deemed sale within the meaning of Article 336(29A)(d) of the Constitution of India and hence service tax not leviable.
Facts-
Petitioner is the Liquidator of a company – Swire Oilfield Services India Private Limited [the company (in liquidation)]. The company (in liquidation) was engaged in providing Cargo Carrying Units (CCU or containers) on rental basis to its customers. Admittedly, the containers were not owned by the company (in liquidation) but were taken on lease from one Monument Containers Limited, England (hereinafter referred to as Monument). The containers were used in the offshore exploration industry to transport and store all types of goods such as consumables, equipment, spares etc. that were required during the offshore exploration activity.
As per the lease agreement with Monument, the company (in liquidation) was permitted to give the containers on sub-lease to any party deemed fit and proper. Accordingly, the company (in liquidation) had, vide a lease agreement dated 1st April 2011, given on lease various containers on hire for consideration to one CU Inspection India Private Limited (the lessee). On the lease rental/hire earned by the company (in liquidation), admittedly, the company (in liquidation) discharged VAT at the rate of 12.5%.
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Author Bio
It is Article 366 (29A) d and not 336 (29A)d
an avoidable mistake