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2009 (11) TMI 834 - HC - VAT and Sales TaxWhether there was no transfer of the right to use the vehicles, covered by the contracts, in favour of the hirer so as to make the payments received under the transactions in question exigible to tax under either of the statutes on the basis of the fiction of a deemed sale within the meaning of the relevant provisions of the two Acts read with article 366(29A)(d) of the Constitution? Held that:- The above features of the contract, in our considered view, makes it abundantly clear that it is the ONGC and not the contractor who has exclusive control and dominion over the crane during the subsistence of the contract, though, during the aforesaid period, at times, physical possession of the crane may come back to the contractor. Such temporary physical possession of the contractor, according to us, would hardly be relevant as under the contract the ONGC is vested with the authority to requisition the crane for operational purposes at any time. Besides, such temporary possession of the crane by the contractor does not mitigate against the transfer of the right to use the crane which event, as already indicated on the authority of the decision of the apex court in 20th Century Finance Corpn. Ltd. [2000 (5) TMI 980 - SUPREME COURT OF INDIA] 11constitutes the taxable event under article 366(29A)(d) of the Constitution. The terms of the contract also do not visualize any operation of the tankers/trailers by the owners thereof at any point of time during the period of the contract. The above core terms of the contract being vital for determination of the question of control of the vehicles after the same are hired, the conclusion that can reasonably be reached with regard to the transfer of right to use, necessarily, has to be the same, i.e., that by virtue of the contract agreement in question a transfer of the right to use the goods covered by the contract has been contemplated and in the absence of any contrary material had that been affected by and between the parties. Appeal dismissed.
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