Transfer of right to use goods requires delivery of possession; chilling plant receipts were held not taxable on that basis.

Receipts under a chilling plant arrangement were not taxable as consideration for transfer of the right to use goods under section 3F of the U.P. Trade Tax Act, 1948, because the plant was never placed at the other party's disposal. The dealer remained in possession of the plant, bore the necessary expenses, and could even use ice in the event of power failure. The governing principle applied was that transfer of the right to use goods requires delivery of possession of the goods for use. On those facts, the arrangement did not constitute such a transfer and the revision was dismissed in favour of the assessee.

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Issues: Whether the receipts under the chilling plant arrangement were liable to tax as consideration for transfer of right to use goods under section 3F of the U.P. Trade Tax Act, 1948.

Analysis: The agreement showed that the dealer was to supply milk and water at a specified temperature and that the chilling plant was not placed at the disposal of the other party. The appellate authorities found that the plant remained in the dealer's possession, the dealer bore the necessary expenses, and in case of power failure chilling could be done by ice. The governing principle applied was that transfer of the right to use goods requires delivery of possession of the goods for use.

Conclusion: The arrangement did not amount to transfer of the right to use goods, and the receipts were not taxable on that basis. The revision was dismissed, in favour of the assessee.

Ratio Decidendi: A transaction amounts to transfer of the right to use goods only when possession of the goods is delivered for use; absent such delivery, no tax liability arises under the provision.

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