COMMISSIONER OF SERVICE TAX DELHI vs QUICK HEAL TECHNOLOGIES LIMITED

Bench: 2 — Abhay S. Oka, J.B. Pardiwala

In Brief

Quick Heal Technologies developed and sold antivirus software on CDs/DVDs with license codes to end customers. Revenue authorities claimed this was a taxable 'Information Technology Software Service' and demanded ₹62.73 crore in service tax. The Tribunal allowed the company's appeal, finding the software was 'goods' (not a service) because packaged software lacks the required interactivity and constitutes a deemed sale. The Supreme Court upheld this, holding that packaged/canned software marketed on physical media is 'goods' subject only to sales tax/VAT, not service tax. The transaction cannot be split into separate goods and service components; it is a single composite sale of goods with updates as integral (not separate) services.

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Service Tax Excise Duty Sales Tax/VAT Intellectual Property Information Technology Taxation of Goods vs Services Constitutional Law Software Licensing Composite Transactions Deemed Sale

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