Trade mark licence royalty can be taxed as transfer of right to use goods, even without ownership transfer or possession.

A trade mark licence for royalty, without transfer of ownership or any proprietary interest, is treated as a transfer of the right to use goods under the Maharashtra sales tax statute. The analysis distinguishes assignment from licence: assignment divests title, while a licence permits use for consideration. It also notes that for trade marks, physical delivery or exclusive possession is not necessary, because the taxable event is the transfer of the user-right itself. Concurrent use by more than one person does not remove the transaction from the levy, and the inclusion of trade marks in the statutory Schedule supports taxability.

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Issues: Whether permission to use a trade mark for royalty, without transfer of ownership or any proprietary interest, amounts to a transfer of the right to use goods and is therefore a sale taxable under the Maharashtra Sales Tax on the Transfer of the Right to use Any Goods for Any Purpose Act, 1985.

Analysis: The Act levies tax on the transfer of the right to use any goods for consideration, and its definitions of sale, sale price, and turnover of sales cover amounts received for such transfer. Trade marks are goods for this purpose. The agreement did not assign the trade mark but only authorised its use for consideration by way of royalty. The distinction between assignment and licence is material: assignment divests the owner of title, whereas a licence merely permits use. For a trade mark, actual delivery of possession or control is not necessary for transfer of the right to use, because the nature of the asset permits use through written authorisation. The concurrent use of the trade mark by more than one person does not take the transaction outside the statutory levy. The inclusion of trade marks in the Schedule to the Act confirms taxability.

Conclusion: The transaction amounted to a transfer of the right to use the trade mark and fell within the definition of sale under the Act; the answer to the reference was in the negative, against the assessee and in favour of the Revenue.

Final Conclusion: Royalty received for permitting use of a trade mark was held taxable under the special sales tax statute, and the Tribunal's contrary view was set aside.

Ratio Decidendi: Where a statute taxes transfer of the right to use goods, a trade mark licence for consideration is taxable even without transfer of ownership, title, or physical possession, because the decisive factor is the transfer of the user-right itself.

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