Refundable security deposit for LPG equipment was not sale consideration, as ownership never passed to the consumer.

A refundable security deposit taken for LPG cylinders, regulators and related equipment did not constitute sale consideration under the Punjab General Sales Tax Act because the agreement kept ownership in the Corporation and gave the consumer or distributor no right to treat the equipment as owner. The deposit was only security, was below the cost of the cylinders, and did not itself transfer property in the goods. On the facts recorded, the assessments were also not based on the amended deeming provision relating to transfer of the right to use goods, so the impugned assessment orders could not be sustained on that basis.

---

---

Issues: Whether refundable security deposit taken for LPG cylinders and regulators constituted sale consideration so as to amount to a sale under section 2(h) of the Punjab General Sales Tax Act, 1948, and whether the assessment orders could be sustained on that basis.

Analysis: The agreement terms provided that the cylinders, valves, caps, security nuts, regulators and other equipment would at all times remain the property of the Corporation, and the consumer or distributor had no power to repair, transfer, or deal with the equipment as owner. The deposit was only a security amount, was less than the cost of the cylinders, and did not by itself effect a transfer of property in the goods. On the facts found by the Assessing Authority, the assessments were also not founded on the amended deeming provision relating to transfer of the right to use goods.

Conclusion: The security deposit did not amount to sale consideration, no sale arose by transfer of property in the cylinders and regulators, and the assessment orders could not be sustained on that basis.

Final Conclusion: The writ petitions succeeded and the impugned assessment orders were set aside, leaving the authority free to proceed afresh only if legally permissible.

Ratio Decidendi: A refundable security deposit, without transfer of ownership or other indicia of sale, does not constitute sale consideration for tax purposes under the sales tax law.

---