Transfer of the right to use goods: electricity meter hire charges were treated as taxable sale consideration despite supplier maintenance control.

Monthly rent charged by an electricity supplier for consumer-installed meters was treated as consideration for a transfer of the right to use goods, bringing the charge within the statutory definition of sale. Although the supplier retained inspection, testing, repair, removal and maintenance powers under the Electricity Act and Rules, those supervisory controls did not prevent the consumer from using the meter for its intended purpose of recording consumption and verifying bills. The charge was fixed as hire or rent and not shown to be a mere reimbursement of maintenance expenses, so the contention that it was only a maintenance charge was rejected.

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Issues: Whether the monthly rent collected by the electricity supplier from consumers for meters installed at consumers' premises constituted consideration for a transfer of the right to use goods and was therefore taxable as a sale under the sales tax law.

Analysis: The applicable definition of "sale" included a transfer of the right to use goods, and the constitutional amendment in article 366(29A)(d) reflected the same principle. Under the Electricity Act and the Electricity Rules, meters were supplied on hire in the ordinary course of statutory arrangement when the consumer did not purchase the meter outright. The supplier retained duties of inspection, testing, repair, removal and maintenance, but those statutory controls did not prevent the consumer from using the meter for the purpose for which it was installed, namely, recording consumption and verifying bills. The monthly charge was fixed as hire/rent and was not shown to be a mere reimbursement of maintenance expenditure.

Conclusion: The hiring of meters amounted to a transfer of the right to use goods, and the rent received was taxable as sale consideration. The contention that the amount was only a maintenance charge was rejected.

Ratio Decidendi: Where goods are statutorily supplied on hire and the consumer is entitled to use them for their practical and intended purpose, the transaction constitutes a transfer of the right to use goods even if the supplier retains supervisory and maintenance powers.

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