Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2014 (5) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (5) TMI 570 - HC - VAT and Sales TaxWhether there is transfer of right to use the driling unit of assessee to the ONGC per agreement so as to attract the levy of Lease tax u/s 3A of the TNGST Act - Levy of Lease tax – Intention of Transfer of right to use drilling unit - Transfer of effective control for goods - Terms and conditions put forth in agreement – Held That:- Judgment in in [Bharat Sanchar Nigam Ltd. Vs. Union of India (S.C.) 2006 (3) TMI 1 - Supreme court] followed - In the case of deemed sale relating to transfer of right to use any goods for any purpose, what is required to be seen is the intention of transfer of right to use the goods, which in turn imply transfer of effective control for goods - Relying upon [STATE OF A.P. v. RASHTRIYA ISPAT NIGAM LTD 2002 (3) TMI 705 - SUPREME COURT OF INDIA] - So long as the owner retains effective control over the goods, mere possession given without a right accompanying thereto to result in the transfer of right to use the goods as he likes, the question of bringing the transaction within the corners of the charging provision does not arise. Evidencing the fact that the effective control of the rigs remained with the contractor, that the assessee merely gave a directions where the rigs were to operate, even in the context of the assessee giving directions to the contractor to take the rigs to the specified points, the said direction per se does not mean that the assessee had complete control over the machinery – Thus, a reading of the various terms show that what is given to the assessee by the contractor was his services through the rigs owned by the contractor and going by the decision referred to above, there is no hesitation in accepting the assessee's case. Considering the various clauses in the agreement, indicating that the effective control ever remained with the assessee, the mere fact that the area of operations were as stated by ONGC does not make rigs as come under the effective control of the ONGC to bring transactions as assessable under Section 3-A of the Act - Thus, applying the decision of the Apex Court reported in [2002] 126 STC 114 STATE OF A.P. v. RASHTRIYA ISPAT NIGAM LIMITED and the subsequent decision reported in BHARAT SANCHAR NIGAM LIMITED v. UNION OF INDIA [2006 (3) TMI 1 - Supreme court] - It is hold that the transactions did not amount to transfer of right to use the goods to fall under Section 3-A of the Tamil Nadu General Sales Tax Act - There is no hesitation in accepting the assessee's contention thereby the order of Tribunal is set aside - Revision stands allowed - Consequently, connected TCMP is closed – Decided in favour of assessee.
|