Hire-purchase transactions taxable on consolidated agreement amounts, including hire charges, under the expanded sales tax definition.

Under the Bengal Finance (Sales Tax) Act, 1941 as extended to Delhi, hire-purchase transactions fell within the expanded definition of "sale" after the 1959 amendment, and the amounts payable under such agreements formed part of the "sale price". The statutory scheme treated hire-purchase as a taxable transfer itself, not merely the later exercise of the option to purchase, so hire charges and finance charges were included in the tax base. A narrower reading would have made the hire-purchase limb of the definition ineffective, and the transaction was therefore taxable on the consolidated amount payable under the agreement.

---

---

Issues: Whether, under the Bengal Finance (Sales Tax) Act, 1941 as extended to Delhi after the 1959 amendment, hire-purchase transactions were liable to sales tax on the entire amount payable by the hirer, including hire charges and finance charges, as part of the sale price.

Analysis: The statutory definition of "sale" under section 2(g) was expanded to include a transfer of goods on hire-purchase or other instalment system, and section 2(h) defined "sale price" as the amount payable as consideration for the sale. The earlier decisions recognising hire-purchase as a transaction containing both bailment and an element of sale were read as supporting the legislative competence to tax the hire-purchase transaction itself. The amendment did not confine taxation only to the price payable at the stage when the option to purchase is exercised. On a plain reading of the definition, the amount payable to the dealer on a hire-purchase transfer forms part of the sale price, and the exclusion urged by the appellants would render the hire-purchase limb of the definition ineffective.

Conclusion: Hire-purchase transactions were taxable on the consolidated amounts payable under the agreement, including hire charges, and not merely on the bare price of the vehicle at the time ownership passed.

---