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TMI Blog2009 (6) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Right to use any Goods for any Purpose Act, 1985, the Tribunal was justified in holding that the impugned transaction does not amount to a sale under the provisions of the Lease Act? 2.. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that even after consideration that the constructive possession of the computer being given to the contractee mentioned in the impugned invoice the computer continues to be under effective control of the respondents-contractor and, therefore, transfer of right to use the computer by the contractee could not be held to have taken place as covered by the term 'sale' occurring in the Lease Act?" This court directed the Tribunal to send statement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is made for the purpose of levy of tax under sections 3 and 4 of the Act. Sections 3 and 4 read as follows: "3. Incidence of tax.-Subject to the provisions contained in this Act and the Rules made thereunder a tax shall be leviable on the turnover of sales in respect of,- (i) the transfer of the right to use any goods agreed to before the appointed day but the right to use is exercised on or after the appointed day; (ii) the transfer of right to use any goods agreed to prior to the appointed day, and wherein the right to use has been continued after the appointed day, to the extent of the sale price received or receivable in respect of such use on or after the appointed day; and (iii) the transfer of right to use any goods agreed to on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts have engaged their operators to work with the computer. The appellants pay the salary of the operators. The appellants pay the electricity charges required for running the computer. At no point of time physical possession, or effective control of the computer is delivered to the ONGC. The officials of the ONGC bring their floppy and get the outputs from their computer. If the computer goes out of order, naturally, the owner in possession of the same will be required to repair the same. By no stretch of imagination, ONGC would be required to pay the repairing charges." In Bharat Sanchar Nigam Ltd. v. Union of India [2006] 3 VST 95; [2006] 145 STC 91, the Supreme Court was required to consider whether the delivery of goods is necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .. In State of Andhra Pradesh v. Rashtriya Ispat Nigam Ltd. [2002] 126 STC 114 (SC); [2002] 3 SCC 314, it was claimed by the sales tax authorities that the transaction by which the owner of certain machinery had made them available to the contractors was a sale. The court rejected the submission saying that: '. . . the transaction did not involve transfer of right to use the machinery in favour of contractors. . . The effective control of the machinery even while the machinery was in use of the contractor was that of the respondent-company, the contractor was not free to make use of the machinery for the works other than the project work of the respondent or. . . (para 4, page 196 of STC); (para 4, page 315 of SCC)'." In concurring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere also delivered at some stage. Delivery of the goods at some stage is very important. In view of the observations of Their Lordships in paragraph 75, (page 124 of 145 STC) if no delivery has taken place at any stage, this requirement would be missing and it would be difficult to say that transfer of right to use the goods was effected. List of goods is given in the Schedule to which this Act is applicable. As per the Schedule, transfer of the right to use video cassette, television sets, video cassette recorders, video cassette players or projectors, vehicles like trucks, tractors, buses, jeeps, cars, three wheelers, etc., are covered. A videographer or the photographer may be engaged to cover certain function. Naturally the videographer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gal right to use the goods and for the period during which transferee has such legal right, it has to be to the exclusion of the transferor. In the present case, from the facts noted earlier, it is clear that the goods, i.e., computers and terminals were always in possession of the respondents. They were never delivered or handed over to the ONGC. It may be that as per the requirement of ONGC, fixed time was assigned to them and during that fixed time of the day, staff members of ONGC would come to the office of the respondents to get their work done but during all that period, computers would be operated by the employees of the respondents and not by the employees of the ONGC. Merely because a person agrees to provide service to a particu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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