TMI Blog1987 (3) TMI 491X X X X Extracts X X X X X X X X Extracts X X X X ..... rs" can be levied by the State Legislature by virtue of entry 54 of List II of the Seventh Schedule to the Constitution. By the Constitution (46th Amendment) Act, 1982, article 366 which the definition clause of the Constitution was amended and the words "tax on the sale or purchase of goods" were defined to include by clause (29A) of article 366: "(29A) 'tax on the sale or purchase of goods' includes (a) a tax on the transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration; (b) a tax 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 serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of letting out of bank locker. It has now to be seen whether this case comes within the extended meaning of "sale" given in clause (ii) of section 2(g). Unlike clause (iii) of section 2(g) which brings within the ambit of "sale" any supply of goods or drink by way of or as part of any service, clause (ii) merely speaks of "any transfer of any right to use any goods for any purpose". It has been stated in the writ petition that the facility of utilising the safe deposit vaults to the customers is given by the bank only as part of the various banking services rendered by the bank to the customers. It will be necessary to examine the right enjoyed by the customers to decide the question whether there has been "any transfer of the right to use any goods for any purpose in this case". It has been stated in the writ petition that the lockers are located in the banking premises. The lockers are installed by the bank to enable the customers to keep cash, jewellery or other valuables in safety. It is only because of the safety provided by the bank, the customers make use of the bank lockers. It has been further stated in the writ petition that safe deposit lockers are installed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the affidavit, it has been stated that the lockers are normally kept in the security vaults of the bank and are not by themselves immovable properties. It has been stated that the lockers are like pigeon holes in almirahs placed in the vaults or strong rooms of the bank and those are generally not attached/fixed/fastened to earth or to the walls. The lockers are like compartments in an almirah with independent weights L.M.T., but there is no device in the design of such lockers for fastening or embedding. Therefore, those are obviously movable chattels and banks can remove any block of lockers to any other bank or anywhere if they so decide, at ease with no disturbance to vaults/ strong rooms. It has further been alleged in the affidavit after referring to the standard agreement between the bank and its customers, "the bank retains no right to prevent the allottee from using the locker if the allottee observes the regulations agreed upon. During the continuance of the agreement, the bank transfers all rights over the locker to the customer who uses it as his own security block. The customer may keep the locker empty or he may keep it full. He may not open it for years together or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or sub-let the safe or any part with it nor hold it to be used for any purpose other than the deposit of valuable and other property. The bank under clause (10) has reserved the right during extraordinary contingencies like riots, etc., to close the safe deposit vault or to make changes in the times of opening and closing of the vaults without any previous intimation to the customer. It has further been provided under clause (11) that "the connection of the bank and the renter of the safe is that of the lessor and lessee for the within mentioned safe and not that of a banker and customer." It has further been provided in the conditions that the lessee will abide by such rules and regulations as the safe deposit department of the bank may from time to time adopt. The bank may require the lessee to vacate the locker on giving one month's notice and the bank will not be responsible for any damage whatsoever to the contents of lockers on failure to comply with such notice, should the bank remove the locker cabinets from the vaults to another vault of the bank or any other place. In my judgment, this is not a case of any "transfer of the right to use any goods for any purpose" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ckers were not kept in the strong room of the bank or if the security and the safety of the lockers were not ensured by elaborate security arrangement made by the bank, the customer would not have taken these lockers on rent. To borrow the language of Viscount Finlay in the case of Governors of the Rotunda Hospital v. Coman [1921] AC 1 (HL) the subject which is hired out is a complex one. In Rotunda Hospital's case [1921] AC 1 (HL), the Governors of the hospital had built a building which was connected with the hospital which was let out for public entertainment, concert, etc., for periods varying one night to six months. The income was utilised for the purpose of running the hospital. The dispute was about the nature of the income for the purpose of assessment of income tax. The rooms were fitted with arrangements for sitting, heating, attendance and various other facilities. The question was whether the profits that were derived by the hospital were letting out of the rooms and assessable as such to income tax. It was held by the House of Lords: "Profits are undoubtedly received in the present case which are applied to charitable purposes, but they are profits derived n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not use the vault for any other purposes except for storing cinema films. The customers could not transfer, assign, sublet or under let or grant any licence in respect of or part with the possession of the vault or any part thereof without with written Permission of the assessee. The assessee was entitled to revoke, determine and put an end to the licence by giving the licensee at any time 70 days previous notice in writing. The assessee was entitled to terminate the licence by giving two days' notice to the licensee and allocate to the licensee alternative space in another vault of the same property. Apart from these conditions the key to each vault was retained by the vault holder but the key to the entrance which permitted access to the vaults was kept in the exclusive possession of the assessee. The assessee also rendered other services to the vault holder. A fire alarm was installed and an annual amount was paid to the municipality towards fire services. Several other facilities were provided which need not be elaborated. The Supreme Court held: "But the learned counsel for the Commissioner says that section 9 applies because the assessee cannot be said to be in occupat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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