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TMI Blog2009 (7) TMI 1381X X X X Extracts X X X X X X X X Extracts X X X X ..... mon question of law. Brief facts of the case are that the opposite parties are the owners of the buses and entered into contract with the Uttar Pradesh State Road Transport Corporation (hereinafter referred to as ( UPSRTC ) for providing the buses. The Assessing Authority had levied the tax on the amount received by the opposite parties from UPSRTC under Section 3-F of the Act treating the transactions under the transfer of right to use the buses. The contention of the opposite parties were that providing of buses under the contract did not amount to transfer of right to use. This contention had not been accepted by the Assessing Authority and on the basis of the agreement particularly, clause 1 of the agreement, had held that the possessio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to issue the tickets and to receive the rent will be with the first party. The conductors shall be appointed by UPSRTC and buses shall be operated on the directions of the conductors. The drivers and the conductors all shall be abide with the directions of the first party. The period of contract shall be for three years unless renewed further. Clause 14.2 says that in case if the second party wants to transfer the ownership to another person, he has to take prior permission from the first party. Clause 14.3 says that in case if without giving any prior notice, the ownership is transferred by the second party, the agreement shall stand cancelled and for the rest of the period, second party is liable for damages @ Rs. 500/- per day. In respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service providers to the subscribers, the question of the right to use those goods, would not arise. 7 . In the case of State of Andhra Pradesh and another us. Rashtriya Ispat Nigam Limited, reported in MANU/SC/0163/2002 : 2003 UPTC 273 (SC) it was claimed by the Sales Tax Authorities that the transaction by which the owner of certain machinery had made them available to the contractors was a sale. The Court rejected the submission saying that: .. the transaction did not involve transfer of right to use the machinery in favour of contractors. The effective control of the machinery even while the machinery was in use of the contractor was that of the respondent Company; the contractor was not free to make use of the machinery for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identity of the goods; c. The transferee should have a legal right to use the goods consequently all legal consequences of such use including any permissions or licenses required there for should be available to the transferee; d. For the period during which the transferee has such legal right, it has to be the exclusion to the transferor this is the necessary concomitant of the plain language of the statute viz. a transferor of the right to use and not merely a licence to use the goods; e. 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. 11. In view of the decision of Constitution Bench of the Apex Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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