TaxTMI 
TaxTMI 
1979 (10) TMI 207
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....d to resale as contemplated under the Bihar Sales Tax Act, 1959 (Act 19 of 1959)? (2) Whether, in the facts and circumstances of the case, the second proviso to section 7(2)(b) of the Bihar Sales Tax Act, 1959 (Act 19 of 1959), was applicable?" 2. The aforesaid two questions, in substance, mean, whether the transfer of goods on hire-purchase by the dealer would be deemed to have been for the purpose of resale or whether such transfers would be deemed to have been made in violation of the declaration given by the dealer in form IX of the Bihar Sales Tax Rules. It may be stated that under section 7 of the Act, for the purpose of computing the taxable turnover of a registered dealer, certain types of sales are deducted from the....
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....ng dealer's taxable turnover. The reference to section 38, in the above quotation, is a reference to the penal provisions under the Act which makes the offence of violation of the declaration made in form IX of the Bihar Sales Tax Rules an offence punishable with imprisonment or fine or both. 3. The two questions referred for opinion of this Court have arisen because, according to the Superintendent of Commercial Taxes, the transfer of goods on hire-purchase by the dealer did not amount to resale and, consequently, there was a violation of the declaration given by the dealer while purchasing the goods, thereby attracting the second proviso of sub-section (2)(b) of section 7 of the Act. According to the Deputy Commissioner of Co....
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....ercial Taxes seems to have gone on the facts of the case, taking an overall view of the said description and the Tribunal has gone upon the normal concept of hire-purchase in the business world. 5.. I will now state briefly the facts of the case: The assessee is a registered dealer, dealing mainly in fans, sewing machines and accessories, in the town of Gaya. The periods of assessment are 1960-61 to 1964-65. The assessments for the first three periods, namely, for 1960-61 to 1962-63, were made by recourse to reassessment proceedings. The other two assessments are regular assessments. Admittedly, during the relevant periods, the assessee transferred some of his goods under hire-purchase agreement, which goods he had purchased af....
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....rities. It was, however, not the dealer, but the department which went up in revision against the orders passed by the Deputy Commissioner of Commercial Taxes in respect of the five periods in question. Before the Commercial Taxes Tribunal, a wider question, as to whether the transfer of goods on hire-purchase amounted to sale, was put for its consideration. The Tribunal held that even in a hire-purchase agreement, one of the aspects is that all sales fructify into option to purchase by the intending purchaser. The Tribunal further observed that, by virtue of the explanation, which had been added to section 2(p) of the Act, transfer of goods on hire-purchase shall be deemed to be a sale. The Tribunal, therefore, rejected the contention of t....
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....e I find that almost an identical question on identical facts has been decided by the aforesaid decision of a Bench of this High Court in the case of Bihar State Agro-Industries Development Corporation v. State of Bihar[1973] 31 S.T.C. 484; (1973) 1 B.B.C.J. 1. In that case also, the dealer, which was dealing in tractors and agricultural equipments, had entered into hire-purchase transactions in respect of some of the goods which it had purchased after giving a declaration that the said goods were being purchased for the purpose of resale. Such parts of the hirepurchase transactions were assessed in terms of the second proviso to section 7(2)(b) of the Act. The dealer challenged the jurisdiction of the assessing authority to include such tr....
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....o if the ultimate object is to pass the property in the goods to the hirer, it cannot be said that the goods had been utilised for a purpose other than for resale. In the modern world "hire-purchase" has come to be a method of selling and purchasing goods. The purchaser with his limited finance wants to purchase the goods; the seller wants to sell his goods, but not lose his right over it unless full price has been paid. The converging point between these two is a transaction on hire-purchase. "Hire-purchase" must not be confused with the two expressions that go to make it "hire" and "purchase". If the substance behind the transaction is to pass the right over the property or the goods to the hirer, it cannot but be an attempt at resale ....