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2005 (8) TMI 649 - ALLAHABAD HIGH COURTRevision u/s 11 of the U.P. Trade Tax Act, 1948 (the Act) - liability to tax u/s 3F - hiring charges - transportation of the employees - Whether, there was any transfer of effective control of the buses by the assessee to the two companies - HELD THAT:- The bare perusal of section 3F of the Act shows that the provision of section 3F is applicable only in cases where there is transfer of right to use the goods. In Rashtriya Ispat Nigam Ltd. v. Commercial Tax Officer, Company Circle, Visakhapatnam [1989 (12) TMI 325 - ANDHRA PRADESH HIGH COURT], the petitioner which owned the Visakhapatnam Steel Project, for the purpose of the steel project, allotted different parts of the project work to contractors. To facilitate the execution of work by the contractors with the use of sophisticated machinery, the petitioner had undertaken to supply the machinery to the contractors for the purpose of being used in the execution of the contracted works of the petitioner and received charges for the same. The respondents made a provisional assessment in view of the enlarged definition of "sale". Thus, it is clear that for the transfer of right to use the goods and to invoke the provision of section 3F of the Act, it is necessary that there should be transfer of effective control of the goods in favour of the party. On Perusal of the terms of the contracts shows that the effective control of the buses has never been transferred to the aforesaid two companies and it always remain with the assessee. The assessee only provided the buses for transportation of employees of the companies from one place to another place and the price was stipulated only for the purposes of transportation and not for the leasing of the entire bus as such for a definite period. The entire expenses for running of the buses, namely, diesel charges, salary of driver/conductor, road tax, passenger tax, etc., are to be borne by the assessee. In this view of the matter, I am of the opinion that there was no transfer of right to use the vehicles by the assessee to the aforesaid two companies and the provision of section 3F of the Act is not applicable. The order of the Tribunal is upheld. In the result, revision fails and is, accordingly, dismissed.
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