Transfer of right to use goods: exclusive equipment use for consideration treated as lease and taxable sale under sales tax law.

An arrangement for wire line logging and perforation was treated as a lease where the contractor retained ownership of the equipment but transferred the right to use it exclusively for the oil company's operations for consideration. Because the Assam General Sales Tax Act, 1993 defines sale to include transfer of the right to use goods under a lease, the contract fell within the statutory concept of sale. The contractual terms of exclusive use, supervision by the oil company, and payment of rental charges supported that conclusion. Authorities concerning immovable property and different statutory settings were held inapplicable, and deduction of sales tax at source under the contract was therefore valid.

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Issues: Whether the contract for wire line logging and perforation amounted to a lease and, consequently, a sale within the meaning of the Assam General Sales Tax Act, 1993, so as to justify deduction of sales tax at source.

Analysis: The contract showed that the contractor's equipment remained its property, but the right to use the equipment for the oil company's operations was transferred for consideration in the form of rental charges. The statutory definition of sale included transfer of the right to use goods under a lease, and the definition of lease under the Act covered any arrangement transferring such right without transfer of ownership. The contractual terms showed exclusive use of the equipment for the oil company's work, supervision and inspection by the oil company, and payment of rental charges, indicating an arrangement falling within the statutory concept of lease. The reliance placed on authorities dealing with immovable property and different statutory contexts was held to be inapplicable.

Conclusion: The contract constituted a lease under the Act and therefore amounted to sale within section 2(33)(iv) read with section 2(19); deduction of sales tax at source under the contract was valid and not illegal.

Ratio Decidendi: Under the Assam General Sales Tax Act, an agreement transferring the right to use goods exclusively for consideration is a lease and is taxable as a sale even though ownership and physical possession of the goods remain with the contractor.

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