Right-to-use tax applies only when effective control and possession pass, not on mere transportation charges.

Transportation charges received for carrying petroleum products were held not to constitute tax on a transfer of the right to use tankers under section 3F of the U.P. Trade Tax Act, 1948. The provision applies only where effective control and possession of the goods pass to the other party. On the facts recorded, the tankers remained in the transporter's control and possession, the transporter bore the expenses, and the vehicles were used only for carrying specified goods. Mere receipt of transportation or hire charges does not create a taxable transfer where custody and control do not pass.

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Issues: Whether transportation charges received under the agreement for carrying petroleum products amounted to tax on the transfer of the right to use the tankers under section 3F of the U.P. Trade Tax Act, 1948.

Analysis: Section 3F applies only where there is a transfer of the right to use goods. On the facts found by the Tribunal, the tankers always remained in the control and possession of the transporter, the expenses were borne by it, and the tanker was used only for transporting the specified goods. The governing principle is that a taxable transfer requires effective control and delivery of possession of the goods to the other party; mere receipt of transportation or hire charges is not enough. The conclusion accords with the settled position that custody alone is not possession and that the right to use is not transferred unless control passes to the other party.

Conclusion: The receipts were not exigible to tax under section 3F, and the revisions were liable to fail.

Final Conclusion: The Tribunal's view was affirmed and the revisions were dismissed, leaving the assessee successful.

Ratio Decidendi: Liability under the right-to-use provision arises only when effective control and possession of the goods are transferred to the other party; where the owner retains control and possession, no transfer of the right to use occurs.

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