2011 (3) TMI 1506 - GAUHATI HIGH COURT

the contract, in the case at hand, is for rendering services and not for transfer of right to use equipment?

Held that:- The contract agreement, in the present case, obliges the contractor to render the services of “welllogging, perforating and other wireline services” by using its own equipments and thereby no transfer of right to use equipments can be said to have taken place in the present case. Situated thus, it becomes clear, and we do hold, that the petitioner is not liable to pay tax, under the TST Act, 1976, in respect of the consideration received for the execution of contract, in question; hence, the action of the revenue authority, in raising the demand for deduction of sales tax at source treating the contract, in question, as transfer of the rights to use goods is wholly without jurisdiction and liable to be set aside and quashed, which we hereby accordingly do. Appeal allowed.