JUDGMENT

When a customer contracts with a courier company to deliver his package to its international destination, does the customer pay for the use of the courier's computer network, the cargo planes and the cargo vehicles? Does a customer ordering a coffee at a coffee shop pay for the use of the coffee machine? Does an industrial concern contracting with a utility company for supply of power pay for the use of, or acquire the right to use, the power generation equipment of the power utility? The commonsense answer to all these questions is in the negative, reflecting the true commercial and legal character of such transactions. In all these cases, it would be inane to say that the customer contracted to use, or acquired the fight to use, the equipment of the services or goods provider. But this is precisely the inanity that underpins the repeat orders passed by the tax department and, we say with somewhat reserved respect, by the learned Appellate Tribunal also, all of whom held that the taxp...