Bombay High Court: Duphar's Sale of "Crocin" Trademark Deemed an Export

Here's an interesting case about the well-known trademark "Crocin" and whether its sale was taxed in Maharashtra or considered an export. Let's break it down!

The Case Begins

M/s. Duphar Interfran Ltd., a company based in Mumbai, sold the trademark "Crocin" to SKB, a UK-based company, through a Brand Acquisition Agreement on January 18, 1996. The big question was whether this sale was taxed in Maharashtra or if it was an export.

What's the Deal?

• Trademark Sale: Duphar sold "Crocin" to SKB.
• Location: SKB is in the UK, but the trademark was registered in India.
• Agreement: Made in London, but followed Indian laws.

Tax Trouble

The Maharashtra Sales Tax Tribunal decided that the sale was local and taxed it at 4%. Duphar wasn't happy and took the matter to court.

Duphar's Argument

• Export Claim: They argued that the sale was an export since SKB is in the UK.
• Intangible Assets: Said the trademark is something you can't touch, so it goes with the owner, who is in the UK.

State's Stand

• Local Sale Claim: The state argued the sale was local because the trademark was registered in India.
• Tax Due: They insisted the sale was taxed at 4%.

Court's Take

The High Court of Bombay, with Judges M.S. Sonak and Advait M. Sethna, had to decide if the sale was local or an export.

"The assignment of the trademark 'Crocin' was deemed to have taken place in the course of export," said the court.

Summary of the Verdict

The court ruled in favor of Duphar, stating that the sale was indeed an export. This meant no sales tax was applicable under the Central Sales Tax Act, 1956.

Duphar won this round, and the sale of "Crocin" was considered an export, not taxed in Maharashtra.