1990 (7) TMI 347

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....ct, 1947 and section 61 of the Bombay Sales Tax Act, 1959. "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in coming to the conclusion that the transactions entered into by the respondent with their customers were not sales of motor vehicles, but were merely financing transactions?" 3.. The respondent, M/s. Pashupati Trading Company, Nagpur ("the dealer") carried on inter alia, business of financing prospective buyers of motor vehicles distributed by M/s. National Garage, Nagpur ("the distributor"). These buyers (whom we will refer as "customers") select a vehicle and settle the price with the distributor. The customers approach the dealer for finance and give a proposal indicating their ne....

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....dealer that these transactions with the customers were merely financial in nature and not sales. However, the Tribunal in revisions on the basis of the ratio of the case of Sundaram Finance Ltd. v. State of Kerala [1966] 17 STC 489 (SC), accepted the contention of the dealer and held that the transactions did not amount to sale. On the application of the Commissioner of Sales Tax, the Tribunal made the five references by a common order. 5.. Now, hire-purchase agreement is a modern phenomenon in the commercial world. Consumer articles multiplied and their demands increased. People wanted to have articles, but did not have sufficient finance. The clear object of entering into such transactions is to have the article with the help of the fi....

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.... the point involved is concluded by a decision of the Supreme Court in the case of Johar and Co. v. Deputy Commercial Tax Officer [1965] 16 STC 213 (SC), where very similar if not identical transaction is held to be that of sale. The only difference pointed out to us between that case and the instant case is that there hirer was not mentioned in the invoice, the hirer was prohibited from representing as owner and the token sum of Re. 1 payable at the time of exercise of option was payable at the end and not in the beginning. In our view these differences are inconsequential in the whole background and do not affect the ratio of that decision. We may incidentally mention that the Supreme Court has held in that case that even mentioning of....