Transfer of right to use goods requires transfer of possession or control; bus hire for employee transport was not taxable.

Liability under section 3F of the U.P. Trade Tax Act, 1948 depends on whether the transaction transfers possession or effective control of the goods to the customer for use. Where buses were supplied only for employee transport at specified times, while the driver and conductor remained with the dealer and custody or control did not pass to the customer, there was no transfer of the right to use goods. The arrangement was therefore not taxable as a transfer of the buses.

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Issues: Whether providing buses for employee transportation under an agreement amounted to a transfer of right to use goods so as to attract tax under section 3F of the U.P. Trade Tax Act, 1948.

Analysis: Liability under the provision depends on whether the transaction shows transfer of possession or control of the buses to the customer for use. The buses were supplied only for transporting employees at specified times and charges, while the driver and conductor remained with the dealer. The record did not show that custody, possession, or control of the buses was transferred to the company. On these facts, the transaction was not one of transfer of right to use goods.

Conclusion: The issue was decided in favour of the assessee and against the Revenue; the transaction was not taxable as a transfer of right to use the buses.

Ratio Decidendi: A hiring arrangement does not amount to transfer of right to use goods unless possession or control of the goods is transferred to the hirer for use.

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