TMI Blog2022 (5) TMI 1190X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as the corresponding assessment order of the STO are hereby set aside and the order of the ACST is restored to file - revision petition disposed off. - STREV Nos. 289 and 290 of 2008 - - - Dated:- 10-5-2022 - S. MURALIDHAR CHIEF JUSTICE AND R. K. PATTANAIK JUDGE Appeared in this Case: For Petitioner Mr. Ch. Satyajit Mishra, Advocate For Opposite Party Mr. Sidharth Shankar Padhy, Additional Standing Counsel JUDGMENT Dr. S. Muralidhar, CJ. 1. STREV No.290 of 2008 is taken up by a separate notice. 2. These revision petitions by the Assessee arise out of an order dated 17th September 2007, passed by the Orissa Sales Tax Tribunal ( Tribunal ) in S.A. Nos.1416 and 1415 of 2000-01. By the said impugned order, the Tribunal reversed the order passed by the learned Assistant Commissioner of Sales Tax (ACST) Koraput Range, dated 21st January 2000, allowing the Assessee s appeals for the years 1990-91 and 1991-92. Those appeals in turn were directed against the assessment order dated 31st March 1994, passed by the Sales Tax Officer (STO) for the year 1990-91 and 1991-92, treating the hire charges collected by the Assessee for letting out on lease ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is was not reflected on the sales turnover. Terming this as a transfer of the right to use of the aircraft, the STO treated as is a deemed sale and held that the hire charges received in the sum of Rs.1,55,500/- would be amenable to sales tax at 16%. 9. When the matter travelled to the ACST by way of appeal by the Assessee, the said appeal was allowed by the order dated 21st January 2000. The ACST noted that the Assessee had not entered into any written contract with the hirers for transfer of right to use the aircraft. At no point of time, possession of the aircraft was transferred to the hirers, since the control of the aircraft always remained with the Pilot employed by the Assessee. The cost of the fuel, the salary of the Pilot during course of the flying, had been borne by the Assessee. As per the conditions of the statutory permit, the Assessee always bore the risk, statutory obligations and responsibility while operating the aircraft. Accordingly, it was held that this would not constitute sale within the meaning of Section 2 (g) (iv) of the OST Act. In other words, it did not amount to a transfer of right to use for any purpose. 10. It must be noted at this stage that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riate legislature by creating legal fiction can fix situs of sale. In the absence of any such legal fiction the situs of sale in case of the transaction of transfer of right to use any goods would be the place where the property in goods passes, i.e. where the written agreement transferring the right to use is executed. (c) Where the goods are available for the transfer of right to use the taxable event on the transfer of right to use any goods is on the transfer which results in right to use and the situs of sale would be the place where the contract is executed and not where the goods are located for use. (d) In cases where goods are not in existence or where there is an oral or implied transfer of the right to use goods, such transactions may be effected by the delivery of the goods. In such cases the taxable event would be on the delivery of goods. (e) The transaction of transfer of right to use goods cannot be termed as contract of bailment as it is deemed sale within the meaning of legal fiction engrafted in Clause (29A) (d) of Article 366 of the Constitution wherein the location or delivery of goods to put to use is immaterial. 15. In first place, it must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istence, the taxable event on the transfer of the right to use goods occurs when a contract is executed between the lessor and the lessee and situs of sale of such a deemed sale would be the place where the contract in respect thereof is executed. Thus, where goods to be transferred are available and a written contract, is executed between the parties, it is at that point situs of taxable event on the transfer of right to use goods would occur and situs of sale of such a transaction would be the place where the contract is executed (Emphasis ours). 74. In determining the situs of the transfer of the right to use the goods, the Court did not say that delivery of the goods was inessential for the purposes of completing the transfer of the right to use. The emphasized portions in the quoted passage evidences that the goods must be available when the transfer of the right to use the goods take place. The Court also recognized that for oral contracts the situs of the transfer may be where the goods are delivered (see para 26 of the judgment) 75. In our opinion, the essence of the right under Article 366 (29A) (d) is that it relates to user of goods. It may be that the act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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