Motor vehicle ownership passes by sale, not registration mutation, and dealer resale on own account is not agency service.

Transfer of ownership of a motor vehicle is governed by the Sale of Goods Act, 1930, not by mutation of the registration certificate under the Motor Vehicles Act, 1988; change of name in the registration record is therefore not a condition precedent to an effective sale. The transaction was treated as a sale, not an agency arrangement, because the dealer took possession, refurbished the vehicle, fixed the resale price, bore the market risk, and sold on its own account. On that basis, the used-car dealings were not business auxiliary service transactions under the Finance Act, 1994.

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Issues: (i) Whether change of name in the registration certificate under the Motor Vehicles Act is mandatory for an effective sale of a motor vehicle; (ii) Whether the dealer purchased the used vehicle or merely acted as an agent or intermediary to the original owner.

Issue (i): Whether change of name in the registration certificate under the Motor Vehicles Act is mandatory for an effective sale of a motor vehicle.

Analysis: The sale of a motor vehicle, being movable property, is governed by the Sale of Goods Act, 1930, and not by the registration provisions of the Motor Vehicles Act, 1988. Section 50 of the Motor Vehicles Act and Rule 55 of the Central Motor Vehicles Rules deal with post-transfer formalities and reporting, while Section 19 of the Sale of Goods Act makes the passing of property depend on the intention of the parties. The registration certificate is relevant to use of the vehicle on the road and to statutory compliance, but mutation of the registration entry is not a condition precedent to the transfer of ownership.

Conclusion: Change of name in the registration certificate is not mandatory for an effective sale of a motor vehicle.

Issue (ii): Whether the dealer purchased the used vehicle or merely acted as an agent or intermediary to the original owner.

Analysis: The transaction showed that the dealer took possession of the used vehicle, obtained blank transfer forms, refurbished the vehicle, bore the market risk, fixed the resale price, and sold it in its own commercial course. The original owner had no continuing role in the resale or in the price fluctuations. These features were inconsistent with a mere agency or intermediary relationship and indicated a sale under the Sale of Goods Act rather than a service attracting business auxiliary service tax under Section 65(19) of the Finance Act, 1994.

Conclusion: The dealer purchased the used vehicle and did not merely act as an agent or intermediary.

Final Conclusion: The appeals lacked merit because the used-car transactions were sales governed by the Sale of Goods Act, 1930, and not service transactions under the Finance Act, 1994, so the Tribunal's orders were sustained.

Ratio Decidendi: For a motor vehicle, transfer of ownership is governed by the Sale of Goods Act, 1930, and not by mutation of the registration certificate under the Motor Vehicles Act, 1988; a transaction is a sale when the parties intend property to pass and the dealer acts on its own account rather than as a mere intermediary.

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