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TMI Blog2007 (9) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be transfer of right to use the goods under section 3F of the Act. In view of the above law laid down in the aforesaid decision by the apex court and the High Courts, it is clear that for the transfer of right to use the goods and to invoke the provision of section 3F of the Act, the delivery of the possession is sine qua non. - - - - - Dated:- 14-9-2007 - RAJES KUMAR , J. RAJES KUMAR J. These four revisions under section 11 of the U.P. Trade Tax Act, 1948 (hereinafter referred to as the Act ) are directed against the order of the Tribunal dated August 3, 1999 relating to the assessment years 1990-91, 1991-92, 1992-93 and 1993-94. Opposite party is a transport company and engaged in transporting the goods of various parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Nimai Das, learned Standing Counsel and Sri Piyush Agrawal, learned counsel for the opposite party. Sri Nimai Das, learned Standing Counsel very fairly referred to some of the clauses of the agreement, which have been filed along with the supplementary affidavit, particularly clause Nos. 4, 8 and 9 to show that all the expenses were borne by the opposite party. Permit, etc., under the Motor Vehicle Act were also obtained by the opposite party. Having heard learned counsel for the parties, I have perused the order of the Tribunal and the authorities below. The Tribunal has categorically recorded the finding that the control and possession of the tankers have never been transferred by the opposite party to the Indian Oil Corporati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and that the contract was for purely labour and service. The department, however, contended that hire charges received by the transporter come within the definition of sale price . Considering the enlarged definition of sale in view of the Constitutional amendment, the Orissa High Court held as follows: . . . In order to decide whether a transaction is of 'sale', the determinative factor is whether any transfer of right of user is involved. By way of illustration we may indicate that if 'A' allows his vehicle to be used by 'B' for a consideration, and the vehicle is placed at the control, custody and possession of 'B', it may be a case of transfer of the right to use the vehicle for any purpose. Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contractors were not exigible to sales tax. To come to this conclusion, the Andhra Pradesh High Court relied on Corpus Juris Secundum, Vol. 87, page 892 which emphasised that the essence of transfer is passage of control over the economic benefits of property which results in terminating rights and 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 custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not free to make use of the machinery for the works other than the project work of the respondent or move it out during the period the machinery was in his use; the condition that the contractor would be responsible for the custody of the machinery while it was on the site did not militate against respondent's possession and control of the machinery. A similar question came up for consideration before the Division Bench of this court in the case of Ahuja Goods Agency v. State of Uttar Pradesh reported in [1997] 106 STC 540; [1997] 11 NTN 484. The petitioner received transportation charges from a distillery in connection with the transportation of Indian-made foreign liquor from distillery to various Government-bonded warehouses. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported in [2006] 145 STC 91; [2006] 3 VST 95; [2006] 6 JT 114 (SC), the apex court held that for the transfer of right to use the goods, goods must be at a deliverable stage and at some stage it should be delivered. This court, in the case of Commissioner, Trade Tax, U.P., Lucknow v. Jamuna Prosad Jaiswal, Allahabad, reported in [2008] 13 VST 403 (All); [2006] UPTC 285, held that unless possession and control of the goods is transferred there cannot be transfer of right to use the goods under section 3F of the Act. In view of the above law laid down in the aforesaid decision by the apex court and the High Courts, it is clear that for the transfer of right to use the goods and to invoke the provision of section 3F of the Act, the deliv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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