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TMI Blog2015 (5) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... is necessary that there must be a consensus ad idem as to the identity of the goods. It is further necessary that the transferee should have a legal right to use the goods, all legal consequences of such use including any permissions or licences required therefor should be available to the transferee and for the period during which the transferee has such legal right, it has to be and to the exclusion of the transferor. Having transferred the right to use the goods during the period for which it is to be transferred, the owner cannot again transfer the same rights to others. It would thus be seen that unless all the requirements are transferred, the transaction will not come within the meaning of “Transfer of the rights to use any goods”. - Tribunal has extensively reproduced the terms of contract which are also been reproduced by us hereinabove. Perusal of the terms of contract would reveal that as per the contract, the driver, cleaner, diesel and oil was to be provided by the respondent. So also, transportation of accessories was to be done by the respondent. It can further be seen that there is no provision in the contract that the legal consequences such as permissions or lice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, an Appeal came to be preferred. The learned Tribunal reversed the finding of the learned Additional Commissioner and held that the transaction entered into between the respondent and M/s. Offshore Hook-Up & Construction Services (I) Pvt. Ltd. would not amount to sale as defined under section 2(10) of the Lease Act. 3. The learned counsel for the revenue has submitted that the learned Tribunal has grossly erred in holding that the respondent was not a dealer within the meaning of Section 2(4) of the Lease Act and that the transaction entered by the respondent/assessee with Offshore Hook-Up & Construction Services (I) Pvt. Ltd. did not come within the meaning of sale as defined as under 2(10) of the Lease Act. The learned counsel submitted that, the perusal of terms and conditions entered into between the respondent/assessee and Offshore Hook-Up & Construction Services (I) Pvt. Ltd. would clearly reveal that after the vehicle was given on hire to the contractor, the entire control remains with the contractor and the respondent/assessee ceases to have any sort of control over the crane in question. The learned counsel, therefore, submitted that as such the transaction squarely fel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... members." 7. The term 'Sale' is defined under section 2(10) of the Lease Act as under: "Sale" means the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash deferred payment or any other valuable consideration and the word 'Sell' with all its grammatical varieties and cognate expressions shall be construed accordingly." 8. The aforesaid provision, therefore, makes it amply clear that for a person to come within the definition of 'dealer', he is required to transfer the right to use any goods for any purpose. It could, thus, be seen that the right to use any goods for any purpose is essential so as to bring the person within the ambit of dealer as defined in the said Act. Consequently, for the transaction to be a sale within the meaning of the said Act, what is essential is transfer of right to use any goods for any purpose. The learned Tribunal has reproduced the terms of quotation as given by the Respondent to Offshore Hook-Up & Construction Services (I) Pvt. Ltd. and the terms of acceptance by the said Offshore Hook-Up & Construction Services (I) Pvt. Ltd., which are as under: "To, M/s. Offshore Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to your account. 6. Minimum period of contract will be 20 days at a stretch any extension to be calculated on a pro-rata basis. 7. Advance payment of ₹ 1,00,000/- (Rupees One Lakh only) will be made after crane reaches the worksite at Uran LPG Plant. 8. Roads for working condition of crane will be adequate. 9. Hire charges will commence only from when the boom is assembled and crane is ready for operation and will cease on written demobilization orders or 20 (twenty) days of operation which is latter. 10. Hire charges shall be ₹ 2,50,000/- (Rupees Two Lakhs fifty thousand only) for 20 (twenty) days 12 (twelve) hours shift/day on a lump-sum basis for crane, crane operators and riggers. You are required to carry the following valid documents in original to the work site and submit copies of the same immediately at our office. 1. Fitness Certificate. 2. Insurance papers. 3. Tax Certificate. 4. Loading Certificate. 5. Tax and Registration book. In addition, your crane is to have the following: 1. Spark arrestor for both engines. 2. Radiation Caps. 3. Fuse box covers. 4. Starter Cover. 5. Lockable Diesel Tank Caps. 6. Battery Cover. 7. All ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. It may also be noticed that even the Appellate Deputy Commissioner, Kakinada, in the order dated November 15, 1999 in regard to assessment years 1986-87 and 1987-88 held that under the terms and conditions of the agreement there was no transfer of right to use the machinery in favour of the contractor. Although it cannot be said that the appellant was estopped from contending otherwise in regard to assessment year 1988-89, it is an additional factor and circumstance, which supports the stand of the respondent." 10. The said judgment of the Apex Court fell for consideration before the Larger Bench consisting of three Hon'ble Judges of the Apex Court in the case of Bharat Sanchar Nigam Ltd. & Anr. vs. Union of India & Ors., reported in (2006) 145 STC 91(SC). The Apex Court has considered the said judgment in paragraph 76, which reads thus: "76. In State of Andhra Pradesh vs. Rashtriya Ispat Nigam Ltd. (2002) 3 SCC 314, it was claimed by the sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use the goods. The another condition that has been laid down is that Having transferred the right to use the goods during the period for which it is to be transferred, the owner cannot again transfer the same rights to others. It would thus be seen that unless all the requirements are transferred, the transaction will not come within the meaning of "Transfer of the rights to use any goods". 13. Though Ms. Badheka has relied on the judgments of various High Courts and also of Tribunals, we do not find it necessary to refer to all of them. It will be sufficient to refer to some of the judgments of High Courts. In the case of Commissioner, VAT, Trade and Taxes Department vs. International Travel House Ltd., reported in (2009) 25 VST 653 (Delhi), the Delhi High Court has considered as to whether the contract between the respondent/assessee and M/s. NDPL for hiring of Maruti Omni cabs amounted to transfer of right to use any goods so as to come within the definition of 'Sale' as provided under the Delhi Value Added Tax Act, 2004. After considering the terms and conditions of contract and considering the judgment of the Apex Court in the case of Bharat Sanchar Nigam Ltd. & Anr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d control the permissions and licences with respect to the Maruti Omni Cabs or the said permissions and licences remained in possession of the respondent. These are never transferred to M/s. NDPL. It, therefore, cannot be said that there is a sale of goods by transfer of right to use goods inasmuch a necessary ingredient of the sale being the transfer of right to use the goods is absent, namely, ingredient as stated in para 97(c) of the BSNL‟s case. The judgments which were cited during the course of arguments, namely, State of A.P. v. Rashtriya Ispat Nigam Ltd., (2002) 3 SCC 314 and Aggarwal Bros. V. State of Haryana, (1999) 9 SCC 182 have been duly explained by the Supreme Court in BSNL s case. The crucial ‟ factor in this regard differentiating the two cases was the intention to transfer the right to use. Whereas in the case of Rashtriya Ispat Nigam Ltd., there was no intention to transfer the right to use, in the case of Aggarwal Bros. it was found that there was an intention to transfer the right to use. In the present case, the judgment of Aggarwal Bros. does S.T. Appeal No. 10/2009 Page 16 not help the appellant inasmuch as there is no intention to transfer the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax." 15. After taking into consideration the various clauses of contract entered between the assessee and the owners of the vehicles, the Division Bench held that there was no transfer of right to use so as to term the said as within the meaning the said Act to make it taxable. The Court, therefore, found that show cause notice issued was without jurisdiction and as such, allowed the petition, setting aside the show cause notice. 16. As already discussed hereinabove, the learned Tribunal has extensively reproduced the terms of contract which are also been reproduced by us hereinabove. Perusal of the terms of contract would reveal that as per the contract, the driver, cleaner, diesel and oil was to be provided by the respondent. So also, transportation of accessories was to be done by the respondent. It can further be seen that there is no provision in the contract that the legal consequences such as permissions or licences were to be transferred to the transferee. The ultimate control over the crane retained with the respondent. We find that the learned Tribunal, applying the judgment of Apex Court, has rightly construed that the transaction which were entered into by the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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