TMI Blog2003 (6) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner-company in cylinders and the same are reached to the eventual consumers through a network of authorised dealers. The terms and conditions on which supplies are made to the authorised dealers, are embodied in the form of written agreements, the standard form of which has been enclosed to the writ petition. As the question arising for determination in the present case would call for a close scrutiny of the aforesaid terms and conditions under which the items in question are supplied, it would be appropriate to note at this stage, the salient features of the said agreement. Under the agreements in force between the petitioner-company and its distributors, apart from the price of gas, a cylinder service charge at the rate of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of the amount collected by the petitioner-company on account of rent received in respect of delayed return of the gas cylinders as per terms of the agreements, as noticed above. According to the primary authority as well as the appellate authority, to whom an unsuccessful approach was made by the petitioner-company, the aforesaid amounts collected by the petitioner-company, by way of rent, would be exigible to sales tax under the provisions of section 8(1)(f) read with Schedule VII to the Act. As section 8(1)(f) of the Act makes the turnover in respect of an operating lease exigible to tax at the rate specified in Schedule VII to the Act, the obvious stand of the authority is that retention of the gas cylinders after the expiry of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Orissa High Court in the case of Asiatic Gases Ltd. v. State of Orissa reported in [2001] 121 STC 405, has taken a different view holding that such amount realised by way of rent or penalty on account of delayed return of cylinders would not make such returns liable for inclusion in the taxable turnover. Mr. Joshi, learned Senior Counsel has argued that it is the view of the honourable Orissa High Court that should commend itself to this Court. 5.. The honourable Andhra Pradesh High Court in the case of Industrial Oxygen Company Pvt. Ltd. [1992] 86 STC 539, held the amounts, received by way of rent on delayed return of cylinders to be exigible to tax upon a finding that under the contract agreement in force between the parties, there wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contract agreements in force. No law of general application is discernible in any of the aforesaid decisions. This Court must, therefore, proceed to record its own conclusions in the matter on the basis of the terms of the agreement of the present case. 6.. A perusal of the contract agreement between the parties would amply reveal that the transfer of the property in the cylinder was not for any period of fixed duration. Though the property in the cylinders always remained with the manufacturers/sellers, what was intended is, transfer of the right to use of such property subject to payment as per terms of the agreement. The parties contemplated that there would be initially a rent free period of 15 days, wherefter rent would be charge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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