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TMI Blog2007 (5) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... court was delivered by S.H. KAPADIA J. This civil appeal is directed against the judgment and order dated September 21, 2000 passed by the Orissa High Court in S.J.C. No. 157 of 1996 Reported in [2001] 121 STC 405 (Orissa)., holding that the consideration received by the manufacturer for over-retention of gas cylinders did not constitute "sale price" as defined under section 2(h) of the Orissa Sales Tax Act, 1947. According to the impugned judgment there was no transfer of right to use the cylinders and that the charge levied by the respondent-assessee for over-retention of the gas cylinders was in the nature of penalty, and therefore, the same did not form part of the sale price as defined in section 2(h) of the 1947 Act. The imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided that the cylinder was the property of the assessee; that it was given on loan for 14 days free from payment of any charges; that if the customers retained the said cylinders beyond the period of 14 days then the customer was liable to pay 50 paise per day in respect of each cylinder for certain number of days and thereafter Rs. 2 per day. In the event of loss or damage of the cylinder the customer was required to compensate the assessee for such loss in terms of the schedule mentioned in the contract. In terms of the said contract as stated above the assessee collected Rs. 42,500 (approx.) during the year 1986-87 as charges for over-retention from its customers. We find merit in this civil appeal filed by the department. Firstly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e customer the transfer of the right to use the said goods came into existence. It may be that for the first 14 days the said loan is free from payment of any charges. However, exemption from payment would not militate against the concept of transfer of the right to use the goods. Thirdly, in the impugned judgment the High Court has failed to notice the provisions of section 2(g)(iv) which states that the "sale" shall mean any transfer of property in goods for cash or deferred payment or for any other valuable consideration and that it shall include transfer of the right to use such goods for any purpose, whether or not for specified period for cash, deferred payment or any other valuable consideration. Lastly, it is important to bear in mi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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