TaxTMI 
TaxTMI 
2007 (9) TMI 553
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....ered into an agreement with Indian Oil Corporation for the transportation of petroleum products from one place to another and received transportation charges. The assessing authority levied the tax on the transportation charges on the ground that the tankers were provided on hire to Indian Oil Corporation for the transportation of the petroleum products. Thus, there was transfer of right to use the tankers and, therefore, such charges were held liable to tax under section 3F of the Act. Being aggrieved by the assessment orders, opposite party filed appeals before the Deputy Commissioner (Appeals), who allowed the appeals and set aside the assessment orders. Being aggrieved by the order of the Deputy Commissioner (Appeals), Commissioner of T....
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....how from the agreement that the finding recorded by the Tribunal is erroneous. Section 3F of the Act reads as follows: "Section 3F. Rate of tax on the right to use any goods or goods involved in the execution of a works contract.-Notwithstanding anything contained in section 3A, or section 3AAA or section 3D, the turnover relating to the business of transfer of the right to use any goods for any purpose or of transfer of the property in the goods whether as goods or in some other form involved in the execution of a works contract shall be determined in the manner prescribed and shall be liable to tax at such rate not exceeding fifteen per cent, as the State Government may, by notification, declare and different rates may be declared for d....
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....ed as hire charges, no transfer of the right to use is involved." In Rashtriya Ispat Nigam Ltd. v. Commercial Tax Officer, Company Circle, Visakhpatnam [1990] 77 STC 182 (AP), the petitioner which owned the Visakhapatnam Steel Project, for the purpose of the steel project, allotted different parts of the project work to contractors. To facilitate the execution of work by the contractors with the use of sophisticated machinery, the petitioner had undertaken to supply the machinery to the contractors for the purpose of being used in the execution of the contracted works of the petitioner and received charges for the same. The respondents made a provisional assessment in view of the enlarged definition of "sale". Then the Andhra Pradesh High....
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.... case of State of Andhra Pradesh v. Rashtriya Ispat Nigam Ltd. reported in [2002] 126 STC 114; [2002] 2 JT (SC) 493. The apex court had affirmed the order of the Andhra Pradesh High Court and held as follows (at page 116 of STC): "The High Court after scrutiny and close examination of the clauses contained in the agreement and looking to the agreement as a whole, in order to determine the nature of the transaction, concluded that the transactions between the respondent and contractors did not involve transfer of right to use the machinery in favour of the contractors and in the absence of satisfying the essential requirement of section 5E of the Act, i.e., transfer of right to use machinery, the hire charges collected by the respondent fro....
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.... transportation charges were paid for service under the agreement and there was no transfer of right to use the vehicle. The Division Bench examined the agreement and held that the truck to be used for carrying the goods will continue to remain in the custody of the drivers employed by the owners of the trucks. The distillery could have used the vehicle only for the purpose of specified goods and not for any other purposes. The transit risk was of the petitioner and not of the distillery. It was the duty of the transporter to abide by all the laws relating to the motor vehicle and the excise. From these factors, it is manifest that there was no transfer of possession even of the vehicle, which was being used for carrying the goods. On these....