TMI Blog1989 (12) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract; (c) a tax on the delivery of goods on hire-purchase or any system of payment by instalments; (d) a tax on the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration; (e) a tax on the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration; (f) a tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration; and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made." Thereafter, the Sales Tax Acts of the States including the Andhra Pradesh General Sales T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The person to whom they are delivered is called the 'bailee'." Thus in bailment there is transfer of goods for a particular period and thereafter the goods have to be returned to the person delivering them. One of the categories of bailment is hire of chattel. In Halsbury's Laws of England (Fourth Edition) at paragraph 1551 it is defined as follows: "It is a contract by which the hirer obtains a right to use the chattel hired in return for the payment to the owner of the price of the hiring." It is this category of bailment of goods that is the tax base under section 5-E of the Act. The taxable event under section 5-E is the transfer of the right to use any goods. What does this phrase connote? This means that unless there is a tranfer of the right to use the goods, no occasion for levying tax arises; providing a facility which involves the use of goods nor even a right to use the goods is not enough, there must be a transfer of that right. "The transfer of a right is an event which has a double aspect. It is the acquisition of a right by the transferee, and loss of it by the transferor. The vestitive fact, if considered with reference to the transferee is a derivative titl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the petitioner and received charges for the same. The respondents made provisional assessment levying tax on the hire charges under section 5-E of the Act. In this writ petition, the petitioner prays for a declaration that the tax levied by the 1st respondent in purported exercise of power under section 5-E of the Act on the hire charges collected during the period 1988-89, is illegal and unconstitutional. The respondents filed a counter-affidavit in support of the levy stating that the validity of A.P. Amendment Act (18 of 1985) which introduced section 5-E of the Act was upheld by the High Court of Andhra Pradesh in Padmaja Commercial Corporation v. Commercial Tax Officer [1987] 66 STC 26; [1987] 4 APSTJ 26. It is further stated that the provisional assessment under section 15 of the Act has been made every month on account of submission of incorrect monthly returns claiming wrong exemption. The petitioner, it is stated, is lending highly sophisticated and valuable imported machinery to the contractors engaged by the petitioner for the purpose of construction of steel project. The machinery like cranes, docers, dumfors, road rollers, compressors, etc., are lent by the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 5-E is absent, the hire charges collected by the petitioner from the contractors are not exigible to sales tax. Now we shall refer to the cases cited by the learned counsel for the parties. In Anamalai Timber Trust Ltd. v. Trippunithura Devaswom AIR 1954 TC 305, the elephants along with mahout were given on contract of lease for a period of one year. During the execution of the contract, an elephant died. It was an admitted case that the elephant died due to rash and negligent act of the mahout. The government which lent the elephant and mahout to the defendant, claimed the value of the dead elephant in the suit. The question was whether the mahout was the employee of the Government who lent the elephant along with mahout or that of the defendant to whom the mahout and the elephant were lent. A Division Bench of the Travancore-Cochin High Court held that the transaction constituted bailment; in so far as the elephant was concerned, the relationship between the plaintiff and defendant was that of the bailor and the bailee, and in so far as the mahout was concerned it was observed that when one person lent his servant to another for a particular employment, the servant, for anyth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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