Meter rentals as transfer of right to use goods were treated as taxable deemed sales under sales tax law.

Supply and installation of electricity meters by the Electricity Board, with collection of meter rentals, was treated as transfer of the right to use goods and therefore taxable under section 5E of the Andhra Pradesh General Sales Tax Act, 1957. The meters were regarded as movable property, not articles attached to earth merely because they were fixed in consumers' premises for recording consumption. As the Board retained ownership but supplied the meters for exclusive use under the statutory scheme and conditions of supply, the arrangement satisfied the ingredients of a deemed sale under article 366(29A)(d) of the Constitution. Maintenance obligations did not alter that character.

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Issues: Whether the supply and installation of electricity meters by the Electricity Board, together with collection of meter rentals, amounted to transfer of the right to use goods and were taxable under section 5E of the Andhra Pradesh General Sales Tax Act, 1957.

Analysis: The meter was held to be movable property and not an article attached to earth merely because it was fixed in the consumer's premises for the purpose of recording consumption. The statutory scheme under section 26 of the Indian Electricity Act, 1910 and the Board's conditions of supply showed that the Board remained the owner of the meters, supplied them for exclusive use, and collected rent for that use. The obligation to maintain correctness of the meter was treated as part of the statutory arrangement and not as negating the transfer of the right to use. The transaction satisfied the ingredients of a deemed sale under article 366(29A)(d) of the Constitution of India and was not reduced to a mere medium for supply of electricity.

Conclusion: The meter rental transactions constituted transfer of the right to use goods and were liable to tax under section 5E of the Andhra Pradesh General Sales Tax Act, 1957.

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