Transfer of right to use software and telecast rights constitutes deemed sale tax when exclusive use is granted for consideration.

A contract for television telecast rights was treated as a transfer of the right to use goods where the memorandum, read as a whole, gave the channel exclusive use of programme software for consideration while the producer retained title. The channel alone could telecast the programmes, exploit advertisements, and receive revenue, showing more than permissive use or joint exploitation. The copying of software by the channel's equipment did not change the character of the arrangement, and the place of telecast was held irrelevant. The taxable event arose on transfer of the right to use, so the transaction was exigible to deemed sale tax.

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Issues: Whether, on the terms of the memorandum of understanding, the arrangement between the producer and the television channel amounted to a transfer of the right to use goods so as to attract deemed sale tax under the constitutional and statutory provisions.

Analysis: The memorandum required the producer to provide programme software, while the television channel alone was entitled to telecast it, canvass advertisements, receive the revenue, and pay a minimum guaranteed fee with a share of advertisement income. The producer retained title to the software, but the channel was given the exclusive right to use and telecast it during the subsistence of the arrangement. Reading the document as a whole, the substantive rights conferred on the television channel showed that the transaction was not a mere permissive use or joint exploitation, but a transfer of the right to use the programmes for consideration. The contractual stipulation that the software would be copied by the channel's equipment did not alter the character of the transaction. The place of telecast was held immaterial, and the taxable event was treated as occurring when the right to use was transferred.

Conclusion: The arrangement amounted to a transfer of the right to use goods and was exigible to tax as a deemed sale; the challenge to the assessment failed.

Ratio Decidendi: Where a contract, read as a whole, confers on another person the exclusive right to use identified goods or software for consideration, while the owner retains title, the transaction constitutes a transfer of the right to use goods and is taxable as a deemed sale.

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