1999 (5) TMI 589 - HC - VAT and Sales Tax

Summary

Issues:
- Whether the Indian Oil Corporation sells cylinders to consumers when dealers accept refundable security deposits?
- Whether the levy imposed on the petitioner by the Assessing Authority should be quashed?
- Whether the orders passed by the appellate and revisional authorities should be set aside?
- Whether the transaction of supplying gas cylinders constitutes a "sale" or bailment?
- Whether the right to use cylinders is transferred for a valuable consideration when security deposits are accepted?
- Whether the petitioner's financial position affects the decision on merits?

Analysis:
1. The primary issue in this case is whether the Indian Oil Corporation sells cylinders to consumers when dealers accept refundable security deposits. The petitioner argued that there is no sale of cylinders as the security deposit is not a valuable consideration and no property in the goods is transferred to the consumer. The petitioner sought to quash the levy imposed by the Assessing Authority and set aside the orders of the appellate and revisional authorities.

2. The respondents contended that the supply of gas cylinders constitutes a sale and not bailment. They argued that the transaction amounts to a sale within the meaning of the Haryana General Sales Tax Act, 1973. The court considered the definition of "sale" under Section 2(1) and whether the right to use cylinders is transferred for a valuable consideration when security deposits are accepted.

3. The court analyzed the concept of "sale" and noted that it typically involves a transfer of property in goods. The court referred to precedents where the transfer of the right to use goods for valuable consideration was considered a sale. However, in the present case, the court found that the cylinders were merely a mode for carrying gas, and the security deposit was less than the cost price, allowing consumers to seek a full refund without deductions.

4. The court distinguished the present case from a precedent involving hire charges for cylinders, emphasizing that the petitioner only collected refundable security without any hire charges. The court rejected the contention that purchasing cylinders on the strength of C forms implied selling the containers, clarifying that the cylinders were used as containers for supplying gas.

5. Ultimately, the court found that the claim made by the respondents that the transaction amounted to a sale was not tenable. The court allowed the writ petition, setting aside the order of assessment and rendering the orders of the appellate and revisional authorities redundant. The court made no order as to costs, concluding the judgment in favor of the petitioner.