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2018 (1) TMI 339 - HC - VAT and Sales TaxTaxability - transferring a right to use certain machinery items - Section 3-F of the U.P. Trade Tax 1948 - Held that: - for the purposes of a levy of tax under Section 3-F, the presence of machinery within the State is not determinative. The taxable event which stands encompassed under section 3-F must and can only be a transfer of a right to use. The situs of such a transaction can only be the place where this right is transferred and conferred - Admittedly here the transfer of a right to use was effected outside the State of U.P. consequent to the execution of the lease agreement. The essential element of the levy, therefore, occurred outside the jurisdiction of this State. There was no element of a "transfer of a right to use" which occurred within this State. The State of U.P. clearly, therefore, stood denuded of the right or authority to tax this transaction. In view thereof, the position taken by the respondent that the presence of the machinery or its consignment into the State would justify the imposition of tax is rendered unsustainable. The levy of tax on the basis of a "transfer of a right to use" cannot be sustained. Revision allowed.
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