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2014 (7) TMI 660 - BOMBAY HIGH COURTLevy of tax on gross turnover - replacement of old / defective parts - Barter transactions - Respondent claimed that there was no sale of old repaired compressors but an exchange of the same for the defective compressors at the option of the customer - Held that:- The section 2(28) clearly stipulates that a sale means a sale of goods within the State for cash or deferred payment or other valuable consideration. Therefore, in order to constitute a sale, it is necessary that there should be an agreement between the parties for the purpose of transferring title to the goods which pre-supposes the capacity to contract; supported by monetary consideration; and the title in the property actually passes in the goods. Unless all these elements are present, there can be no sale. - A defective compressor is brought by the customer of the Respondent to its Sales and Service Office. Thereafter, the customer is informed about the normal time of repairs which is approximately 60 days. At that time, on payment of the repair charges, the customer is given an option either to wait for 60 days or to take another repaired compressor off the shelf of the Respondent. If the customer opts for the latter, then a delivery note cum debit advice as well as a repaired compressor is handed over to the customer. It is therefore evident that there is no sale of the repaired compressor. All that is done is that on payment of repair charges, the customer is given an option not to wait for 60 days and instead take another second hand repaired compressor immediately in lieu of the defective compressor. There was a transaction of cross transfer of property between the defective compressor and the repaired compressor and therefore, there was no consensual agreement of sale supported by price or other montetary consideration. We are in full agreement with the findings of the MSTT on this aspect. What is paid is only the repair charges and not the price for purchasing the repaired compressor. This is clear from the fact that even if the customer opted not to take a repaired compressor off the shelf of the Respondent, it would still have to pay the same repair charges for repairing its own compressor and wait for 60 days to receive the same from the Respondent, after repairs. This puts it beyond the realm of doubt that what is charged to the customer by the Respondent is only repair charges and not a price for the sale of the repaired compressor. - order of the MSTT rejecting the reference application of the Applicant does not suffer from any error whatsoever. The matter does not raise any substantive question of law. - Decided against Revenue.
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