TMI Blog2019 (5) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... posite Party : C.S.C. ORDER ASHOK KUMAR, J. Heard Sri Kushagra Srivastava, learned counsel for the applicant and Sri B.K. Pandey, learned Standing Counsel. This revision under Section 58 of U.P. Value Added Tax (hereinafter referred to as the Act) is directed against the order of the Commercial Tax Tribunal dated 23.03.2011 relating to the assessment year 2004-05. Brief facts of the case are that the applicant is a transporter and is engaged in transporting the petroleum products, which are purchased by the parties from Hindustan Petroleum Corporation Limited. As per the agreement executed in between the applicant and Hindustan Petroleum Corporation Limited there are certain conditions stipulated namely that the contractor will operate the tank trucks for haulage and deliver of bulk dangerous/ non dangerous petroleum products of the corporation as and when required by the corporation. Condition Nos. IV, V, VIII and XV provides as follows:- (iv) Use tank trucks, for the transportation of the products of the corporation, which are fit for ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Hindustan Petroleum Corporation was only to pay the freight charges as per the mileage of the truck tanker. The assessing authority has passed an assessment order dated 29.03.2007 by which he has imposed the tax under Section 3-F of the Act to the tune of ₹ 7,90,95/-. The appeal was filed under Section 55 before the Joint Commissioner (Appeals), Allahabad which was rejected by the Joint Commissioner (Appeals) vide order dated 02.09.2009. Against the order of the Joint Commissioner (Appeals) the Second Appeal was filed by the revisionist being Appeal No. 511 of 2009. The Tribunal vide its order dated 23.03.2011 has affirmed the orders passed by the authorities below and has confirmed the imposition of tax under Section 3-F. Having heard the counsel for the parties, I have perused the order of the Tribunal and the orders of the authorities below. Section 3-F of the Act reads as follows:- Section 3-F. Rate of tax on the right to use any goods or goods involved in the execution of a works contract. Notwithstanding anything contained in Section 3-A, or Section 3-AAA or Section 3-D, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sophisticated machinery, the petitioner had undertaken to supply the machinery to the contractors for the purpose of being used in the execution of the contracted works of the petitioner and received charges for the same. The respondents made a provisional assessment in view of the enlarged definition of 'sale'. Then the Andhra Pradesh High Court held that under the agreement, the effective control of the machinery, even while the machinery was in the use of the contractor, was that of petitioner company. The contractor' was not free to make use of the same for other works or move it out during the period the machinery was in his use. Therefore, the contractor was entitled to make use of the machinery for purpose of execution of the works of the petitioner and there was no transfer of the right to use it as such in favour of the contractor. This is how the court held that the hire charges collected by the petitioner from the contractors were not exigible to sales tax. To come to this conclusion, the Andhra Pradesh High Court relied on Corpus Juris Secondum (Vol. 87) page 892 which emphasised that the essence of transfer is passage of control over the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar question came up for consideration before the Division Bench of this Court in the case of M/s Ahuja Goods Agency and another vs. State of U.P. and others, reported in 1997 NTN (Vol. 11), 484. Petitioner received transportation charges from a distillery in connection with the transportation of Indian made foreign liquor from the distillery to various Government bonded warehouses. Question for consideration was whether the transportation charges was liable to tax under Section 3-F of the act. The contention of the petitioner was that the transportation charges were paid for service under the agreement and there was no transfer of right to use the vehicle. The Division Bench examined the agreement and held that the truck to be used for carrying the goods will continue to reamain in the custody of the drivers employed by the owners of the trucks. The distillery could have used the vehicle only for the purpose specified goods and not for any other purposes. The transit risk was of the petitioner and not of the distillery. It was the duty of the transporter to abide by all the laws relating to the motor vehicle and the excise. From these factors, it is manifest that there was no trans ..... X X X X Extracts X X X X X X X X Extracts X X X X
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