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Issues: Whether renting out tents, shamiyanas, furniture, crockery and allied items by a tent house amounts to a transfer of the right to use goods and is therefore covered by the definition of sale under the Rajasthan Value Added Tax Act, 2003.
Analysis: The definition of sale in section 2(35)(iv) of the Rajasthan Value Added Tax Act, 2003 expressly includes a transfer of the right to use goods for consideration, whether or not for a specified period. The distinction drawn by the Tax Board between goods sent by the assessee's employees for installation and goods carried by the customer was held to be unsustainable, since the manner of delivery or installation does not alter the legal character of the transaction. The Court treated the provision as wide enough to cover transfer of the right to use goods for short duration, and relied on the principle that such transactions constitute deemed sales. The reasoning was supported by the Supreme Court's view that transfer of the right to use goods for consideration satisfies the requirement of a deemed sale.
Conclusion: The activity of providing tents, shamiyanas, furniture, crockery and similar items for use by customers falls within section 2(35)(iv) and is exigible to VAT; the revision succeeds and the Tax Board's order is set aside.
Ratio Decidendi: Where goods are transferred for consideration with a right to use them, even for a limited period, the transaction is a deemed sale and taxability does not depend on whether delivery or installation is arranged by the dealer or the customer.
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