Transfer of right to use goods requires effective dominion, not mere possession; service characterisation defeated the levy.

A transaction is liable to levy as a transfer of the right to use goods only where the transferee obtains effective dominion and the legal right to use the goods; mere physical possession is insufficient. On the facts, the equipment was deployed with the respondent's specialised personnel, no one other than its staff could access or operate it independently, and effective control remained with the respondent. The transactions were therefore characterised as services rather than a taxable transfer of the right to use goods, so Section 3-A of the Tamil Nadu General Sales Tax Act, 1959 was not attracted and the levy failed.

---

---

Issues: Whether the transactions in question attracted levy under Section 3-A of the Tamil Nadu General Sales Tax Act, 1959 as a transfer of the right to use goods.

Analysis: The materials showed that the equipments were deployed by the respondent with its specialised personnel, that no one other than its staff had access to the equipments, and that the user could not operate them independently. Even though physical possession was with the customer, the effective control and operation remained with the respondent company. On those facts, the transactions were characterised as services and not as a transfer of the right to use goods.

Conclusion: Section 3-A of the Tamil Nadu General Sales Tax Act, 1959 was not attracted, and the levy was unsustainable.

Final Conclusion: The revisions failed because the core factual finding was that there was no taxable transfer of the right to use the goods.

Ratio Decidendi: A transaction attracts levy on transfer of the right to use goods only when the transferee obtains the legal right to use the goods with effective dominion over their use, and mere physical possession without such right is insufficient.

---