TaxTMI 
TaxTMI 
1996 (2) TMI 409
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.... 1965-66. The appellant is a dealer in motor vehicles and automobile parts. The question herein, however, is confined to motor-trucks. The appellant sells trucks both by way of direct sale and also on the basis of hire-purchase. We are concerned with the sales effected on hire-purchase basis. According to the hire-purchase agreement entered into between the appellant and the hirer, the period of hire is two years. The agreement stipulates that the entire consideration specified under the said agreement shall be paid within the said period of two years and that, at the end of that period, the hirer shall become the owner. In the course of assessment proceedings, the question-how to value the vehicles and with reference to which date....
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....twelve per cent depreciation per annum. Yet another question before the Sales Tax Officer was whether the sale should be deemed to have taken place at the end of the period stipulated in the agreement or on the date when the hirer actually exercised the option to purchase after paying the full price. The appellant's case was not only that it was entitled to a higher rate of depreciation but also that wherever the period of hire-purchase has been extended by agreement between the parties, the extended period should be taken into consideration and the depreciation worked out for that entire period, i.e., up to the date the hirer exercised the option to purchase. According to the assessee, the sale did not come about automatically at the en....
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.... On the question of rate of depreciation, the Full Bench held that no material was placed by the appellant before the court to hold that the rate actually adopted by the assessing officer was not reasonable. With respect to the other question, the Full Bench declined to express itself. It only held that the appellant has failed to prove, as a fact, that there were extensions. Once there is no such proof, the Full Bench opined, it was unnecessary for them to go into the question whether the Sales Tax Officer was right in holding that the sale comes about automatically at the end of the agreement period irrespective of any other factors. The said view is questioned in this appeal. Before proceeding further, we may mention a fact which is r....
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....hirer exercises the option. It cannot be said that merely because the hire-purchase agreement stipulates a particular period for the total payment of the consideration and for the purchaser to exercise the option to purchase at the end of the said period, the sale does not take place at the end of that period willynilly. There may be cases where the hirer may default in paying the amount within the stipulated period, he may ask for extension and the dealer may grant the extension. In such cases, the sale obviously takes place only when the purchaser exercises the option to purchase after fully paying the agreed amount. In this view of the matter and also in view of the findings of fact affirmed in the assessment order dated July 16, 1976....