Transfer of the right to use goods: truck hire receipts for refrigerated transport were taxable under deemed sale principles.

Truck hire receipts for sending refrigerated vehicles to transport another concern's goods were treated as consideration for a transfer of the right to use goods, attracting tax under section 5E of the Andhra Pradesh General Sales Tax Act, 1957. Applying Article 366(29A)(d) and Explanation IV to section 2(n), the Court focused on whether the trucks were placed at the disposal of others for their transport needs. It found that retention of control over the driver and payment of incidental expenses did not alter the taxable character. Contract documents and way-bills supported the conclusion that the transaction fell within the deemed sale concept, so the hire charges were taxable.

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Issues: Whether the truck hire receipts received by the assessee for sending refrigerated trucks to transport goods of other concerns amounted to a transfer of the right to use goods so as to attract tax under section 5E of the Andhra Pradesh General Sales Tax Act, 1957.

Analysis: Article 366(29A)(d) of the Constitution of India and Explanation IV to section 2(n) of the Andhra Pradesh General Sales Tax Act, 1957 treat transfer of the right to use goods for consideration as a deemed sale. Section 5E of the Andhra Pradesh General Sales Tax Act, 1957 levies tax on the amount realized for such transfer. The material question was whether, on the facts, the assessee placed its trucks at the disposal of other concerns for use in transporting their goods, thereby constituting transfer of the right to use the vehicles. The retention of control over the driver or payment of incidental expenses did not negate the taxable character of the transaction. The Court held that the contract documents and way-bills supported the conclusion that the trucks were sent for the transport needs of others and that the taxable event under section 5E occurred.

Conclusion: The hire charges were liable to tax under section 5E of the Andhra Pradesh General Sales Tax Act, 1957, and the assessee's challenge failed.

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