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TMI Blog2022 (7) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... ges of machinery and it is possible that the sales tax collected pertained to that amount. In any event, merely because a sum of Rs.12,672/- has been shown having been collected as sales tax will not automatically imply that the use of the mechanical excavators for digging of overburden and removing it through tippers and transporting to a dump yard, involved any transfer of property in goods from the Petitioner to the MCL. In absence of any specific finding in that regard by the STO, it could not have been simply presumed that 20% of that work is attributable to sale of goods thereby limiting the deduction only to 80%. In other words, the disallowance of 20% of the hiring charges has to be based on some material which was available to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of property in goods? 3. The background facts are that the Petitioner was awarded a work order dated 1st April, 2003 by Mahanadi Coalfields Ltd. (MCL) under which MCL hired from the Petitioner a mechanical excavator for digging of overburden mechanically without blasting and removal of the tippers mechanically and transporting the over burden to a specific dump yard. For this the Assessee received a sum of Rs.1,31,16,345/- from MCL. Since the work did not involve any transfer of goods and was purely an activity of service the Petitioner did not pay sales tax thereon. The MCL deducted a sum of Rs.2,62,327.89 while making payment of the Petitioner. The Petitioner while producing the TDS certificate for the above sum, claimed refund of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titution of India, 1950, and consequent amendments in the Act includes 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. 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. Where, however, the control, custody and possession over the vehicle remains with A , notwithstanding the fact that certain amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contract of bailment. In Commissioner of Income-tax, Bombay City I vrs. National Storage Pvt. Ltd. (1967) 66 ITR 596 (SC), the observations of Viscount Finlay in Governors of the Rotunda Hospital, Dublin Vrs. Coman (1921) AC 1 (HL) that the subject which is hired out is a complex one were applied. Right is a claim to a thing. It is the liberty of doing or possessing something consistently with law. A right is interest recognized and protected by law. Transfer of right implies that full liberty is vested on the transferee to have the right to use the goods at the exclusion of all others including the owner of the goods. 8. Mr. Mishra, learned Additional Standing Counsel for the Department on the other hand referred to a lin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned with the facts of Kandoi Transport (supra) As in the said case, here too there is nothing to show that the execution of the work order by the Petitioner involved any sale of goods or any transfer of property in goods from the Petitioner to MCL. 11. Consequently, the question framed is answered in the affirmative i.e. in favour of the Assessee and against the Department and it is held that the entire sum received by the Petitioner from MCL for performing the work order was not exigible to sales tax and the amount of TDS deducted by the MCL was refundable to the Petitioner. The impugned orders of the Tribunal, the ACST and the STO to the above extent are hereby set aside. 12. The revision petition is disposed of in the above terms. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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