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TMI Blog1990 (11) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... h the imposition of tax on the "transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration". Following the constitutional clearance to impose tax on the transfer of the right to use any goods, the definition of "sale", as given in section 2(g) of the Orissa Sales Tax Act, 1947 (shortly "the Act") was amended by Act 13 of 1984, and one of its clauses stated that "transfer of the right to use any goods for any purpose" shall also be included in the expression "sale". 2.. Relying on the enlarged definition of "sale", a notice (annexure 1) was issued to the petitioners under sections 11(1), 12(5) and 12(8) of the Act by the Sales Tax Officer, Bhadra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l distinction between a contract of sale as defined in section 4 of the Sale of Goods Act and a transfer of the right to use goods without being accompanied by transfer of the ownership in the goods in favour of the hirer. Unlike sale, in a case of transfer of any right to use goods, the proprietary right in the goods remains with the transferor. The owner of a property has a bundle of rights in it, namely, right to possess, right to use and enjoy, right to usufruct, right to consume, to destroy, to alienate or transfer, etc. In law, it is not only possible but also permissible that the various rights and interest may be vested in various persons. While remaining as the owner of a property, a person may create a charge on the property, mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he person delivering the goods is called the 'bailor'. The person to whom they are delivered is called the 'bailee'." 7.. So, in bailment, there is transfer of goods for a particular period and thereafter the goods have to be returned to the person delivering them. This apart, bailment requires delivery of the goods to the bailee. It is only upon delivery of the goods that the bailee becomes legally possessed of such goods and the hirer or the bailee becomes entitled to enjoy the use of the goods upon periodic payment or other valuable consideration to the bailor. Since the substance of the right is the enjoyment of the goods, the same is completed only upon the delivery of the goods. In other words, only after acquiring possession of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be opened by a customer unless the bank opened the lock with a master key. Customers obtained admission to the vaults only when the bank allowed it. The authority granted to the authorised person had to be recorded in the books of the bank beforehand. The bank had a lien on the goods stored in the locker for the rent payable by the customer. Because of these, the contention of the department to tax the lease of lockers was rejected. 10A. A similar view was taken by a Division Bench of the Andhra Pradesh High Court in State Bank of India v. State of Andhra Pradesh [1988] 70 STC 215. The reason for not regarding hiring of lockers as "sale" in this case, however, was that there was absence of delivery of the goods which was regarded as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . This was illustrated by referring to hiring of a taxi cab under "rent-a-car" scheme, under which a cab is provided when usually the driver accompanies the cab. Here, the driver has the custody of the cab though the hirer will have the possession and effective control of the cab. This was contrasted with the case when a taxi is hired for going from one place to another. It was stated that in such a case, the driver has the custody as well as the possession; and what is provided is, service on hire. In this case, the transaction was not regarded as "sale" inasmuch as the effective control of the machinery was held to be with the transferor and not the transferee. 11.. We have, therefore, to see in the present case whether possession of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermit granted in his favour immediately after the commencement of the agreement and to furnish necessary particulars of such surrender to the Corporation. Though a driver is to be provided by the owner of the vehicle, he has to follow, as per clause 15 of the agreement, the directions, orders and instructions of the authorised officials of the Corporation. If the driver is found disobedient or otherwise misbehaves with other staff or passengers, the owner has to replace him within three days on the request of the Corporation. As per clause 16, the Corporation has to provide the conductor for operation of the services. 13.. The above would show that for all practical purposes, the effective or general control of the vehicle under the agree ..... X X X X Extracts X X X X X X X X Extracts X X X X
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