Right to use goods not transferred where consumer cannot control electric meter; hiring charge was not a sale.

Supply of electric meters to consumers on hire was held not to be a sale under the deemed-sale provision. Although the statutory definition of sale extends to a transfer of the right to use goods for consideration, the arrangement here left control with the licensee: the meter could be installed, inspected, tested, maintained, removed and sealed by the Board, while the consumer had no right to interfere with, alter, remove or replace it. The charge was for the statutory supply-and-measurement arrangement, not for transfer of dominion over the meter, so the transaction fell outside sale.

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Issues: Whether the supply of electric meters by the Board to consumers on payment of hire charges amounted to a sale within section 2(j)(iv) of the H.P. General Sales Tax Act, 1968.

Analysis: The statutory definition of sale includes transfer of the right to use goods for consideration. Section 26 of the Indian Electricity Act, 1910 recognises that a consumer may hire a meter, but the licensee retains control over its installation, inspection, testing, maintenance, removal, and sealing. The consumer has no right to interfere with, alter, remove, or replace the meter or its connections. The meter is installed to enable measurement of supply and billing, and the charge is for the statutory arrangement for supply and measurement, not for transfer of dominion over the meter.

Conclusion: The hiring of the meter did not amount to a sale and the issue was decided against the Revenue and in favour of the assessee.

Ratio Decidendi: A transaction is not a sale under a deemed-sale provision unless there is an actual transfer of the right to use the goods, meaning legally effective control or dominion passes to the user.

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