Deemed sale and right to use goods: compulsory vehicle requisition for election use can still attract sales tax.

Transfer of vehicles to an election authority for election use was treated as a transfer of the right to use goods for consideration under the expanded constitutional concept of deemed sale. The Tripura Sales Tax Act, 1976 was read consistently with Article 366(29A), so vehicles used under requisition could attract sales tax even though the transfer was compulsory rather than a voluntary commercial sale. The mechanism for contesting hiring charges also indicated that the rate fixed by the authority was not conclusive on taxability. On that basis, the transaction was treated as a taxable deemed sale and deduction of sales tax was upheld.

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Issues: Whether the transfer of vehicles under election requisition amounted to a taxable sale under the Tripura Sales Tax Act, 1976 in view of Article 366(29A) of the Constitution of India.

Analysis: The extended constitutional definition of tax on the sale or purchase of goods includes transfer of the right to use goods for valuable consideration. Section 2(g) of the Tripura Sales Tax Act, 1976 was enacted in line with that constitutional enlargement. Vehicles are goods, and when the election authority took control of the vehicles and used them for election purposes, the right to use those vehicles stood transferred to the authority. The Court further held that a sale need not be voluntary in the ordinary commercial sense for sales tax purposes, and that a statutory or forced sale may still fall within the extended definition. Reliance was also placed on the statutory mechanism for dispute over hiring charges, which showed that the rate fixed by the authority was not conclusive and did not exclude taxability.

Conclusion: The transaction was a taxable deemed sale, and deduction of sales tax was valid; the finding of the single Judge was set aside in favour of the Revenue.

Ratio Decidendi: Where a statute adopts the Article 366(29A) concept of deemed sale, a statutory transfer of the right to use goods for consideration is taxable even if the transfer is compulsory and not a voluntary commercial sale.

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