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TMI Blog2022 (6) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... s proceedings in T.A. Nos. 290, 288, 337, 1061 and 289 of 2001 and T.A.No.178 of 2002 dated 09.12.2005 relating to the assessment years 1987-88, 1988-89, 1990-91, 1991- 1992, 1992-93, and 1994-95 and quash the same as illegal. 2. The petitioners are assessees on the file of the second respondent herein under the Tamil Nadu General Sales Tax Act (in short, the Act) and they are manufacturers and dealers of Industrial gases and first selling dealers in the State of Tamil Nadu. The price charged by the petitioners on sale of gases to customers represented ex-works prices and delivery is made at factory gate of their customers only. According to the petitioners, their responsibility ceases once the goods are delivered at the factory gate to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 (5) (iii) and for 1993-94 and 1994-95, penalty was levied under section 12 (3) (b) of the Act. 4. As against the assessment orders of the second respondent, the petitioners filed appeals to the Appellate Assistant Commissioner (CT), Chennai disputing the tax and penalty. The appeals were partly allowed in favour of the petitioners for all the years except the assessment year 1992-93, confirming the tax liability and deleting the penalty completely. However, for the year 1992-93, the first appellate authority dismissed the appeal completely by confirming the tax and penalty. 5. Aggrieved by the orders passed by the appellate authority, the petitioners filed further appeals before the first respondent/Tribunal. Since the appellate authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsfer of right to use the goods and therefore confirmed the assessment order in so far as it relates to rental charges. In order to buttress his submissions, the learned counsel for the petitioners placed reliance on the decision of the Division Bench of this Court in the case of Ram Oxygen Private Limited vs. Joint Commissioner (SMR) of Commercial Taxes reported in 1997 SCC Online Madras 1316 = (1999) 115 STC 629 wherein it was held that the fact that there are two separate bills, one for the value of the goods sold and the other for freight charges and handling charges is not in dispute and therefore, such cost of freight charges or delivery cost must be excluded from the purview of sale price. In Para No.9 and 10 of the order, the Divisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th gas, the assessee required empty cylinders to be returned so that the cylinders could be re-filled and sold/transferred by way of loan. When the cylinders containing medical oxygen were given on loan to the customer, the transfer of the right to use the goods came into existence. For the first 14 days, the said loan is free from payment of charges. However, exemption from payment would not militate against the concept of transfer of the right to use the goods. By interpreting the word 'sale' it was held by the Honourable Supreme Court that it means any transfer of property in goods for cash or deferred payment or for any other valuable consideration. Therefore, it was specifically held that the over-retention charges levied by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egral part of the commodity in question. The word "goods" has been defined in section 2 (d) to mean all kinds of moveable property other than the actionable claims, shares, security and stocks and includes the goods used in words "whether as goods or in some other form". Therefore, goods do have what is called "composite personality". In the present case the said cylinders together with its content namely gas/oxygen constitute 'goods'. Secondly, it is not in dispute that under the contract in the present case, it was open to the customer to buy the gas cylinder or to borrow it on loan from the assessee. For the first 14 days the loan was free from payment of any charges. However, thereafter, a fixed amount was levied by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Tax Act, 1973 (which was similar to section 2 (g) (iv) of this Act) expressly spoke of "transfer of the right to use goods" and not "transfer of goods". In that matter it was argued on behalf of the assessee that in the case of a 'deemed sale' within the meaning of section 2 (I) (iv) there must be a legal transfer of goods. This argument was rejected by this Court stating that the levy of tax was not on transfer of the goods itself but the levy was on the transfer of the right to use such goods for consideration. In our view, the judgment of this Court in Aggarwal case, (1999) 9 SCC 1821 would squarely apply to the present case. In the present case, as stated above, the cylinders filled with medical oxygen/industrial gas were loan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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