Hoardings as goods and transfer of the right to use can amount to sale, but assessment must rest on a valid taxable basis.

Hoardings and related structures let out for advertisement may constitute goods when they are movable property and are made available for exclusive use for consideration, so the transaction can fall within the statutory concept of sale as a transfer of the right to use goods. However, an assessment cannot stand where liability to tax has not been properly determined and the order does not disclose the basis of the taxable turnover, especially when the amended definition applies only prospectively from 1 April 1984. The matter therefore required fresh determination of liability and, if necessary, reassessment confined to the relevant post-amendment period.

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Issues: (i) Whether hoardings and related structures erected by the assessee constituted goods so that their letting out for advertisement amounted to sale under the Bengal Finance (Sales Tax) Act, 1941; (ii) whether the assessment could stand when liability to tax had not been properly determined and the order did not disclose the basis of the taxable turnover; and (iii) whether the matter required fresh proceedings and reassessment from 1 April 1984 onwards.

Issue (i): Whether hoardings and related structures erected by the assessee constituted goods so that their letting out for advertisement amounted to sale under the Bengal Finance (Sales Tax) Act, 1941.

Analysis: The relevant statutory scheme treated as sale not only transfer of property in goods, but also transfer of the right to use any goods for consideration. The Tribunal examined the nature of the hoardings, the terms of the leases and user agreements, and the manner in which the structures were put up and made available to customers. On the majority view, the hoardings were movable property and hence goods, and the letting out of such hoardings for a specified period for valuable consideration constituted a transfer of the right to use goods. The contrary view in one opinion was that the assessing authority had not properly examined the factual and contractual elements required to decide whether each transaction amounted to a transfer of the right to use goods.

Conclusion: The letting out of the hoardings was treated as sale in the facts of the case, though the assessment still required reconsideration on the question of liability.

Issue (ii): Whether the assessment could stand when liability to tax had not been properly determined and the order did not disclose the basis of the taxable turnover.

Analysis: The Tribunal found that the ex parte assessment did not show the basis on which the taxable balance was computed and did not make it clear whether the figure related to the whole year or only the period after the statutory amendment took effect on 1 April 1984. Since the amended definition of sale applied only prospectively from that date, the assessment could not validly proceed on an unspecified basis that might include a pre-amendment period. The absence of a proper prior fixation of liability and the lack of clarity in the assessment order required interference.

Conclusion: The assessment order could not be sustained and had to be set aside.

Issue (iii): Whether the matter required fresh proceedings and reassessment from 1 April 1984 onwards.

Analysis: As the taxable event under the amended definition could arise only from 1 April 1984, the assessee had to be given an opportunity to produce books and documents so that liability could be determined afresh for the relevant period. If liability was found to exist, assessment proceedings could continue; otherwise, they had to be dropped. The Tribunal therefore directed a fresh determination of liability under the charging provisions and the taxable quantum provision before any assessment was made.

Conclusion: Fresh proceedings were directed and the matter was remitted for reassessment, if necessary, only for the period from 1 April 1984 onwards.

Final Conclusion: The challenge to taxability failed on the merits of the character of the hoardings, but the assessment was set aside because liability had not been properly worked out and the order lacked a sustainable basis for the taxable turnover, requiring fresh adjudication.

Ratio Decidendi: Where a statutory definition of sale includes transfer of the right to use goods, hoardings may fall within that expression if they are movable property and are made available for exclusive user for consideration, but an assessment cannot be sustained unless liability and taxable turnover are determined on a legally relevant basis confined to the operative period of the charging provision.

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