Pure transportation contracts do not transfer the right to use goods and are not deemed sales for tax purposes.

A pure carrying contract for transport of goods does not amount to a transfer of the right to use goods. Applying the statutory definition of deemed sale under the Tripura sales tax law, the Gauhati HC accepted the Division Bench view that merely moving foodgrains from one place to another involves no transfer of any right to use the goods. On that basis, a transport-only arrangement falls outside deemed sale treatment, and the tax demand based on that characterisation cannot stand.

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Issues: Whether a pure and simple carrying contract for transportation of goods amounts to a transfer of the right to use goods and thus a deemed sale liable to tax under the Tripura sales tax law.

Analysis: The decisive question was whether mere transportation of foodgrains by carrying contractors involved any transfer of the right to use goods within the meaning of the statutory definition of sale. The Court accepted the prior Division Bench view that in a carrying contract, where goods are only transported from one place to another, there is no transfer of any right to use the goods. On that footing, such a transaction does not fall within the concept of deemed sale under the Act, and the tax demand based on that premise cannot stand.

Conclusion: A pure transportation contract is not a deemed sale and is not taxable on the footing of transfer of the right to use goods.

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