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Issues: Whether the hiring arrangement for cranes amounted to a transfer of right to use goods so as to attract tax under Section 4 of the Tamil Nadu Value Added Tax Act, 2006.
Analysis: The arrangement had to be tested on the settled indicia for a transfer of right to use, namely that goods must be available for delivery, there must be consensus ad idem on the identity of the goods, the transferee must acquire a legal right to use them, the right must be exclusive for the relevant period, and the transferor must not be able to transfer the same right to others during that period. On the facts, the cranes remained in the petitioner's possession and control, and the materials placed before the Court did not establish a transfer of the legal right to use the cranes as goods. The transaction was therefore not shown to be a taxable sale within the extended definition relied upon by the revenue.
Conclusion: The arrangement was not a transfer of right to use goods and no tax was leviable under Section 4 of the Tamil Nadu Value Added Tax Act, 2006.
Ratio Decidendi: A hiring or service arrangement is not exigible to sales tax under the transfer-of-right-to-use limb unless the transferee acquires exclusive legal control and the other settled indicia of such transfer are satisfied.
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