Transfer of right to use goods requires possession and control; revisional order failed after ignoring the assessee's evidence.

Hiring of DG sets and other electrical equipment was not shown to amount to a transfer of the right to use goods under section 5C of the Karnataka Sales Tax Act, 1957, because the assessee retained possession and effective control, used its own technicians and operators, and removed the equipment after the hire period. A suo motu revisional authority cannot sustain an order merely on the basis of a proposition notice; it must consider the assessee's reply and supporting material before reaching a decision. On the material available, the revisional order was set aside and the assessment treating the transactions as non-taxable was upheld.

---

---

Issues: Whether the suo motu revisional order was sustainable and whether the hiring of DG sets and other electrical equipment amounted to a transfer of right to use goods liable to tax under section 5C of the Karnataka Sales Tax Act, 1957.

Analysis: The assessment record showed that the assessee engaged its own technicians and operators, retained possession and effective control of the equipment, and dismantled and removed the equipment after the hire period. The revisional authority proceeded on the basis that the contents of the proposition notice were established, without properly considering the assessee's reply and supporting material. A proposition notice records only a prima facie view and must be adjudicated after considering the assessee's explanation and evidence. On the material before the assessing authority, the transactions were not shown to be transfers of right to use goods.

Conclusion: The revisional order was unsustainable and was set aside. The assessment order holding the transactions non-taxable under section 5C was upheld, and the assessee succeeded.

---