Transfer of right to use goods: exclusive control over transit mixers supports deemed sale taxation under the sales tax law.

Revisional power under section 20 of the Andhra Pradesh General Sales Tax Act depends on whether the order or proceeding is prejudicial to the interests of revenue, and the text rejects importing an additional requirement that the order be erroneous or that revision fail whenever two views are possible. It also states that a contract for transit mixers is taxable as a transfer of the right to use goods under section 5E and article 366(29A)(d) where the customer acquires exclusive legal use, effective control, and deployment of identified vehicles for the contract period. On that construction, the levy applies to the arrangement as a deemed sale.

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Issues: (i) Whether the revisional power under section 20 of the Andhra Pradesh General Sales Tax Act could be exercised on the facts of the case. (ii) Whether the agreement between the petitioners and the customer amounted to a transfer of the right to use transit mixers, attracting section 5E of the Andhra Pradesh General Sales Tax Act.

Issue (i): Whether the revisional power under section 20 of the Andhra Pradesh General Sales Tax Act could be exercised on the facts of the case.

Analysis: The revisional provision under the Andhra Pradesh General Sales Tax Act was held to be materially different from section 263 of the Income-tax Act, 1961. The statutory requirement under section 20 is that the order or proceeding must be prejudicial to the interests of revenue. It was therefore unnecessary to import the additional condition that the order be erroneous. The contention that revision is barred whenever two views are possible was rejected as inconsistent with the language of the Act.

Conclusion: The revisional jurisdiction was available and no interference was warranted on that ground in favour of the petitioners.

Issue (ii): Whether the agreement between the petitioners and the customer amounted to a transfer of the right to use transit mixers, attracting section 5E of the Andhra Pradesh General Sales Tax Act.

Analysis: The agreement was construed as a whole and the decisive question was whether the transferee obtained the legal right to use the identified goods with exclusive and effective control for the contractual period. The arrangement required a dedicated fleet of vehicles to be made available continuously, painted and deployed as per the customer's instructions, with the drivers and operational use subject to the customer's directions. Applying the principles governing article 366(29A)(d), the Court held that the taxable event is the transfer of the right to use goods, not mere delivery or a mere service contract. On the facts found, the customer had the exclusive right to use the transit mixers during the contract period.

Conclusion: The agreement amounted to a transfer of the right to use the transit mixers and was exigible to tax under section 5E, against the petitioners.

Final Conclusion: The revisions failed because both the revisional action and the tax levy were upheld, leaving the assessments and the Tribunal's dismissal undisturbed.

Ratio Decidendi: A contract attracts tax as a deemed sale under article 366(29A)(d) and the corresponding sales tax provision when, on a true construction of the agreement as a whole, the transferee acquires the exclusive legal right to use identified goods with effective control for the relevant period.

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