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of <h1>Court upholds tax on transfer of bus use rights under Orissa Sales Tax Act, 1947. Forty-sixth Amendment valid.</h1> <h3>Krushna Chandra Behera and Another Versus State of Orissa and Others</h3> Krushna Chandra Behera and Another Versus State of Orissa and Others - [1991] 83 STC 325 (Ori) Issues Involved: Imposition of tax on the transfer of the right to use goods under the Orissa Sales Tax Act, 1947 based on the Forty-sixth Amendment to the Constitution.Summary:Imposition of Tax on Transfer of Right to Use Goods: The Forty-sixth Amendment to the Constitution broadened the scope of 'taxes on the sale or purchase of goods' to include the transfer of the right to use goods. The Orissa Sales Tax Act was amended accordingly to encompass such transfers within the definition of 'sale.' A notice was issued to the petitioners for assessment due to hiring out a bus, treating it as a transfer of the right to use the bus.Validity of Forty-sixth Amendment: The Apex Court and previous decisions upheld the validity of the Forty-sixth Amendment, freeing the concept of 'sale of goods' from previous restrictions. The extended definition eliminated the need to refer to the Sale of Goods Act to determine if a sale had occurred.Transfer of Right to Use Goods: The distinction between a contract of sale and a transfer of the right to use goods without transferring ownership was highlighted. The transfer of the right to use goods is akin to bailment, where possession must be delivered to the bailee for the right to use to be effective.Legal Precedents: Various High Court decisions were referenced to determine when hiring out movable property constitutes a sale. Cases highlighted the necessity of possession delivery and effective control by the hirer for a transaction to be considered a sale.Analysis of Agreement: The agreement between the petitioners and the Corporation demonstrated that the Corporation had effective control over the bus, indicating a transfer of possession and the right to use the vehicle. The court concluded that the hiring of the bus constituted a sale under the extended definition.Conclusion: The court dismissed the petition, upholding the tax notice on the transfer of the right to use the bus as valid. The petitioners were unaware of the legal position, leading to no costs being imposed. The interim stay was vacated, and the judgment was agreed upon by both judges.Judgment: The petition was dismissed.*[End of Summary]*
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