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TMI Blog2001 (7) TMI 1253X X X X Extracts X X X X X X X X Extracts X X X X ..... rator who will be in-charge of such equipment, the mode of transport and the time, date and venue of the programme/event. (iii) The equipment is transported to the venue of the programme under the supervision of the petitioner's employee. At site the audio/visual equipments are handled, arranged, installed and operated by petitioners' technicians/operators to meet the requirements of the programme/event. At no time the equipment is given to the possession or control of the customer, nor operated by the customer. (iv) After conclusion of the programme/event, the petitioner's technician/operator dismantles the equipment/system and brings them back to the petitioner's stores. (v) The entire risk in regard to the equipment during transit as well as during the programme remains with the petitioner. Petitioner takes out insurance for all its equipments to cover transit and the programme periods. (vi) The billing is done by the petitioner either in advance or after the programme, as per the agreed rates for all the services, without any bifurcation. 3.. Petitioners contend they are not "dealers" within the meaning of that expression in the Karnataka Sales Tax Act, 1957 ("the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 5, but subject to sub-sections (5) and (6) of the said section, every dealer shall pay for each year, a tax under this Act on his taxable turnover in respect of the transfer of the right to use any goods mentioned in column (2) of the Seventh Schedule for any purpose (whether or not for a specified period) at the rates specified in the corresponding entries in column (3) of the said Schedule." 7.. The provisions of the said section discloses that the sine quo non for exigibility to tax under section 5-C, is the transfer of the right to use any goods. The transfer of the right to use the goods, which may be by way of leasing, letting or hiring, involves the transferor permitting the transferee (lessee/hirer) to use his goods. To constitute such transfer, there should be delivery of possession of the goods by the transferor to the transferee, that is transfer of the effective and general control of the goods with the right to use the goods, as distinct from a mere custody of the goods, from the transferor to the transferee. But, such transfer need not be a "legal transfer of the goods" nor have all trappings of a "lease". The question whether there is such transfer or not is es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other relations in one entity and creating them in another. While construing the word 'transfer' due regard must be had to the thing to be transferred. A transfer of the right to use the goods necessarily involves delivery of possession by the transferor to the transferee. Delivery of possession of a thing must be distinguished from its custody. It is not uncommon to find the transferee of goods in possession while transferor is having custody. When a taxi cab is hired under 'renta-car' scheme, and a cab is provided, usually driver accompanies the cab; there the driver will have the custody of the car though the hirer will have the possession and effective control of the cab. This may be contrasted with the case when a taxi car is hired for going from one place to another. There the driver will have both the custody as well as the possession; what is provided is service on hire. In the former case, there was effective control of the hirer (transferee) on the cab whereas in the latter case it is lacking. We may have many examples to indicate this difference." 8.3 In Krushna Chandra Behera v. State of Orissa [1991] 83 STC 325 (Orissa), the assessee had given its bus on hire to Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the locker is situated only when the bank permitted him and right of ingress and egress relating to lockers is always under the control of the banks. 8.5 In Modern Decorators v. Commercial Tax Officer [1990] 77 STC 470 (WBTT), the business carried on by a decorator was considered. The business consisted of the following: (i) constructing/erecting pandals, barricades, rostrums, etc., as per the requirements of the customers with the aid of bamboos, sal balla, ropes, tarpaulins, decorating cloth and other materials; and after the expiry of the period specified by the customers such pandals, barricades, rostrums, etc., were dismantled by the decorator, with its own men and labour and taken back to its godown and (ii) Hiring chairs, tables and furniture. The West Bengal Taxation Tribunal held as follows: "But, we find that the hiring of pandals erected by decorators at the instance of customers for a specified period, cannot come within the meaning of 'sale' so as to be exigible to sales tax. The argument that the letting value of the different materials with which pandals are erected are 'goods' in our view, makes no difference because it is not the materials that are transferre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when and where the lorry moves to the destination, and continues to be in effective control of the lorry; (iii) the carrier can at any point (of time or place) transfer the consignment in the lorry to another lorry; or the carrier may unload the consignment en-route in any of his godowns, to be picked up later by some other lorry assigned by the carrier for further transportation and delivery at destination. (ii) On the other hand, let us consider the case of a customer (say a factory) entering into a contract with the transport operator, under which the transport operator has to provide a lorry to the customer, between the hours 8.00 a.m. to 8.00 p.m. at the customer's factory for its use, at a fixed hire per day or hire per km subject to an assured minimum, for a period of one month or one week or even one day; and under the contract, the transport operator is responsible for making repairs apart from providing a driver to drive the lorry and filling the vehicle with diesel for running the lorry. The transaction involves an identified vehicle belonging to the transport operator being delivered to the customer and the customer is given the exclusive and effective control of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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