Transfer of right to use goods taxability depends on the contractual transfer's place and existence, not mere delivery.

Taxability under section 3F of the U.P. Trade Tax Act, 1948 depended on the place and existence of the contractual transfer of the right to use goods, not merely on delivery of the goods. The assessee's belated letter of intent did not reliably show an earlier agreement or the place of execution, and contemporaneous materials supported the finding that the lease arrangement was created later. On those facts, the lease transaction was correctly treated as a local taxable sale, and the challenge to taxability failed.

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Issues: Whether the lease transactions and lease rent received by the assessee amounted to a taxable local sale within section 3F of the U.P. Trade Tax Act, 1948, or were outside sales not liable to tax.

Analysis: Under section 3F, the taxable event is the transfer of the right to use goods. The relevant question is where that right is transferred under the contract, not merely where the goods are delivered. On the facts, the asserted prior letter of intent was produced belatedly, contained no reliable indication of the place of execution, and did not satisfactorily establish any earlier agreement or arrangement pursuant to which the equipment was purchased. The contemporaneous materials supported the finding that the lease arrangement was created later and was not a genuine pre-existing commercial arrangement. The earlier decision on transfer of right to use goods did not assist the assessee on these facts.

Conclusion: The lease transaction was rightly treated as falling within section 3F of the U.P. Trade Tax Act, 1948, and the assessee's challenge to taxability failed.

Ratio Decidendi: In a case of transfer of the right to use goods, taxability turns on the place and existence of the contractual transfer itself, and a belated or unsubstantiated document cannot displace concurrent findings that the transaction was engineered to avoid tax.

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