TMI Blog2013 (3) TMI 580X X X X Extracts X X X X X X X X Extracts X X X X ..... ase rental received or receivable during the tax period only, as a right to use goods, is the turnover forming part of sale price. Appeal allowed. - VATAP No. 174 of 2012 - - - Dated:- 12-3-2013 - HEMANT GUPTA AND RITU BAHRI (MS), JJ. For the Appellant : M.P. Devnath For the Respondents : Nitin Kaushal, Assistant Advocate-General, Haryana, The judgment of the court was delivered by HEMANT GUPTA J.- The present appeal arises out of an order passed by the Haryana Tax Tribunal, Chandigarh, on September 10, 2012, holding that the sale price is the aggregate of the monthly rentals payable under the lease agreement for the term of lease and the said aggregate will form part of the turnover of sale for the month when the taxable event occurred, i.e., when delivery of the vehicles was taken by the lessee from the supplier under the lease agreement. After hearing the learned counsel for the parties, we find that the following substantial question of law arises for consideration: Whether, in the facts and circumstances of the present case, the Haryana Tax Tribunal, Chandigarh, has correctly passed an order that the lease rental for the entire lease period is a sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.1 In respect of any vehicle(s) to be registered under the Motor Vehicle (s) Act, 1988, it is the understanding of the parties that, notwithstanding the fact that under the Motor Vehicles Act, 1988 the lessee is registered as the owner and lessor's name is endorsed on the RC book, the lessor shall continue to be the owner of each vehicle(s) for all intents and purposes. Subject to clause 14, each vehicle(s) shall, at all times, be the property and belong to, the lessor and nothing in this agreement shall require, have effect, or be deemed to have effect, to pass title of any vehicle(s) or any part thereof from the lessor. Subject as aforesaid, the lessee's sole rights in relation to any vehicle(s) shall be the use and possession thereof throughout the lease subject to and in accordance with the terms of this agreement. Certain other statutory provisions to appreciate the arguments raised by the counsel for the parties need to be extracted: The Haryana Value Added Tax Act, 2003 2. Definitions. (a) to (c) . . . (d) 'assessee' means any person who is required to pay any tax, interest, penalty, fee or any other sum under this Act or the Rules made ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he delivery thereof and the expression 'purchase price' shall be construed accordingly; 3. Incident of tax.-(1) Every dealer who would have continued to be liable to pay tax under the Act of 1973 had this Act not come into force, and every other dealer whose gross turnover during the year immediately preceding the appointed day exceeded the taxable quantum as defined or specified in the Act of 1973, shall, subject to the provisions of sub-section (4), be liable to pay tax on and from the appointed day on the sale of goods effected by him in the State. (2) Every dealer to whom sub-section (1) does not apply and who is of the class or classes mentioned in column 2 of the table below and whose gross turnover in any year first exceeds the taxable quantum specified in column 3 thereagainst, shall, subject to the provisions of sub-section (4), be liable to pay tax on and from the day mentioned in column 4 thereagainst on the sale of goods effected by him in the State-that this sub-section shall not apply to a dealer who deals e xclusively in exempted goods. Haryana Value Added Tax Rules, 2003 2. Definitions.-(1)(a) to (ze) . . . (zf) 'tax period' means a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y will be deemed sales in the cases of sub-clauses (e) and (f) and the transfer of the right to use any goods will be a deemed sale in the case of subclause (d). Clause (29A) cannot, in our view, be read as implying that the tax under sub-clause (d) is to be imposed not on the transfer of the right to use goods but on the delivery of the goods for use. Nor, in our view, can a transfer of the right to use goods in sub-clause (d) of clause (29A) be equated with the third sort of bailment referred to in 'bailment' by Palmer, 1979 Edition, page 88. The third sort referred to there is when goods are left with the bailee to be used by him for hire, which implies the transfer of the goods to the bailee. In the case of sub-clause (d), the goods are not required to be left with the transferee. All that is required is that there is a transfer of the right to use the goods. In our view, therefore, on a plain construction of subclause (d) of clause (29A), the taxable event is the transfer of the right to use the goods regardless of when or whether the goods are delivered for use. What is required is that the goods should be in existence so that they may be used. And further contract in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e taxable turnover in terms of section 2(zn) of the Act is to be computed in terms of section 6 of the Act. Section 6 of the Act permits the deductions, which are to be made from the gross turnover, but right to transfer goods for the purpose of use does not find mention in any of the provisions of section 6 of the Act. Faced with such a situation, the definition of tax period and turnover as defined in the Haryana Value Added Tax Rules, 2003 (for short, the Rules ) becomes relevant. The tax period in terms of rule 2(zf) of the Rules means a period of time usually a month, a quarter or a year for which tax payable by a dealer is quantified. In the present case, the return filed by dealer is on yearly basis. The turnover is aggregate of the goods sold or purchased by a dealer during a tax period in terms of rule 2(zg) of the Rules. Since the transfer of the right of use in the vehicle is the sale falling within the definition of section 2(zf), therefore, the rentals received or receivable during the tax period is the sale price received by the dealer, exigible to tax in a financial year. The right to use vehicle is dependent upon the monthly payment of rentals and therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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