Transfer of right to use goods fails where an embedded factory machine is merely permitted for customer use.

Rent received for permitting customers to use a hydraulic press embedded in a factory was not taxable turnover under the Kerala General Sales Tax Act, 1963, because the arrangement amounted only to a permission to use, not a transfer of the right to use goods. The press formed part of plant and machinery fixed to the factory and was not movable property severable for use as goods. On the Tribunal's factual finding that the facility was offered on a machine-hour basis when the assessee's own work was slack, no deemed sale arose. The amounts were therefore not exigible to tax, and the deletion from taxable turnover was upheld.

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Issues: Whether rent received for allowing customers to use the hydraulic press attached to the assessee's factory constituted taxable turnover as a transfer of right to use goods under the Kerala General Sales Tax Act, 1963.

Analysis: Liability under the charging provision arises only where the transaction involves goods and there is either a transfer of property in goods or a transfer of the right to use goods. The hydraulic press was part of the plant and machinery embedded in the factory and was not movable property severable from the earth before use. The arrangement found by the Tribunal was only a facility extended to customers on a machine-hour basis when the assessee's own work was slack. On those facts, the transaction was merely a permission to use, not a transfer of the right to use the hydraulic press, and therefore did not answer the extended definition of sale.

Conclusion: The amounts received for use of the hydraulic press were not exigible to tax and the deletion made by the Tribunal was correct.

Final Conclusion: The revisions failed, and the assessee succeeded in resisting inclusion of the hydraulic press rent in taxable turnover.

Ratio Decidendi: A machine embedded in a factory does not become taxable merely because customers are permitted to use it on hire; unless the arrangement amounts to a transfer of the right to use movable goods, no deemed sale arises.

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