1960 (11) TMI 105

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....by the department, and the Tribunal upheld the disallowance. Rs. 68,275 was the total amount due from four purchasers for the machinery sold to them by the assessee under hire-purchase agreements. These sales were in 1949, 1950 and 1951. The aggregate amount due under each of those agreements was taken into account in computing the taxable turnover of the assessee in the year of the transaction. The transactions being in form of hire-purchase agreements, the sale price was payable in instalments. The agreements provided that, in default of payment of the instalments due, the assessee was entitled to a return of the goods. When the goods were returned to the assessee, the liability of the purchaser to pay the remaining instalments ceased; so....

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.... the form of hire-purchase agreements were sales assessable to sales tax. It was on that basis the assessee firm was assessed to sales tax on Rs. 68,275. Though in form it was a hirepurchase agreement the element of sale predominated. The instalments payable under the agreement by the parchaser were thus instalments of the sale price. What remained unpaid in the year of assessment, Rs. 21,191-1-6 represented the unpaid sale price. The goods that were sold were returned to the assessee under the terms of the agreement, and as we said the liability to pay the balance of the purchase price ceased. Rule 5(1)(b) of the Turnover and Assessment Rules provided: "........In determining the net turnover the amounts specified in the following claus....