TaxTMI 
TaxTMI 
2014 (5) TMI 570
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.... their own man power and personal which was done as per the specifications of ONGC? (iii) Whether the Honourable Tribunal was correct in holding that most responsibility rest with ONGC as per Annexure "D" when the Annexure "D" speaks about the materials to be supplied by ONGC for utility like fresh water, diesel, fuel, oil, drilling fluid, cement, mud chemicals and when it has nothing to do with transfer of the drilling unit? (iv) Whether the petitioner has transferred the drilling unit to the ONGC (ie) whether delivery has been made and possession and control of the drilling unit were given to the ONGC as per the principles laid down by the decision of the Bombay High Court reported in 75 STC 217 in the case of 20th Century Finance Corporation with reference to when the transfer of right to use is completed? (v). The terms and conditions of the Agreement stipulates that the drilling unit would be operated by the petitioner and the maintenance of the drilling unit was of the petitioner. In such circumstances as per the principles laid down by the Supreme Court reported in 126 STC page 114 in the case of Rashtriya Ispat Nigam Ltd. Whether there is transfer of right to use s....
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....on to Annexure D of the agreement, which provided for the assessee supplying equipments with technical persons for which charges were paid. Going by the said aspect, when the rigs was hired for specific purpose and were under the effective control of ONGC, even though the agreement was silent on the services, the agreement had to be treated as one attracting the provisions of Section 3-A of the Tamil Nadu General Sales Tax Act. Thus, the Tribunal upheld the assessment. 5. As regards penalty levied, having regard to the the provision under Section 12(3) of the Tamil Nadu General Sales Tax Act, time limit for making imposition of penalty expiring on 31.3.1993. The Tribunal held that no penalty was attracted. Thus, it affirmed the view of the first Appellate Authority on this aspect. As against the order passed by the Sales Tax Appellate Tribunal, the assessee is on revision before this Court. 6. Learned counsel for the assessee placed reliance on the various clauses of the agreement and submitted that the case of the assessee clearly falls within the scope of the decision of the Supreme Court in the case of STATE OF A.P. v. RASHTRIYA ISPAT NIGAM LTD., - 126 STC 114. He contende....
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....AS, OPERATOR desires to have drilling operations conducted in the Offshore waters of India, as may be designated by OPERATOR, AND WHEREAS, CONTRACTOR is owner of Jack-up Rig "GRIFFIN ALEXANDER II" (hereinafter referred to as "Drilling Unit") and willing to perform such drilling operations with Drilling Unit and is able to furnish to OPERATOR its personnel in adequate number for the safe and efficient operations of the Drilling Unit as referred to in Annexure 'A' and Annexure 'B'. " 11. In consonance with the operation thus be conducted by the Contractor, Article 3 of the agreement provides for operating rate per day when the drilling unit is in operation. Article 3.6 provides for non operating rate/ stand by rate when the unit is not operating and is either waiting for materials, orders, instructions, programme from operator waiting on weather/ waiting on cement to set, the contractor (assessee) shall be paid a non operating date rate. Article 3.11 provides for zero rate when the unit is unable to operate or carry normal drilling operation due to the requirements of personnel or equipments or the unit could not move in water depths. Article 3.12 provides for pers....
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....the machines were under the effective control of ONGC. Given the fact that the nature of work place and the same has to be executed, rightly ONGC retained the control as regards the sites where operations have to be conducted. That by itself would not confer any jurisdiction on the Assessing Officer to treat the transaction as one falling under Section 3-A of the Act. 14. Going through the clauses in the agreement, we find the case of the assessee fits in with the decision of the Apex Court reported in 126 STC 114 - STATE OF A.P. v. RASHTRIYA ISPAT NIGAM LTD. The assessee therein which owned the Visakapatnam Steel Project, allotted different part of the project work to the contractors to formulate the work by the contractors with the use of sophisticated machinery for the purpose of being used in execution of the contracted works and received the charges for the same. The Sales Tax authorities assessed the receipts as falling under transfer of right to use the goods. On an assessment made under Section 5E of the Andhra Pradesh General Sales Tax Act which is similar to Section 3A of the Tamil Nadu General Sales Tax Act, in the decision reported in [1990] 77 STC 182 (RASHTRIYA ISP....
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....cting the levy under the concept of deemed sale relating to transfer of right to use goods. Thus the emphasis in the case of transfer of right to use goods, as laid down by the Apex Court in the decision reported in [1999] 113 STC 317 (SC) (Aggarwal Brothers Vs. State of Haryana and Another), is the transfer of the right to use goods and not transfer of goods. The above-said decisions viz., [1999] 113 STC 317 (SC) (Aggarwal Brothers Vs. State of Haryana and Another), and [2002] 126 STC 114 (State of A.P. Vs. Rashtriya Ispat Nigam Ltd. (S.C.), came up for consideration in the decision reported in [2006] 145 STC 91 (Bharat Sanchar Nigam Ltd. Vs. Union of India (S.C.) 16. Referring to the contract between telecom service provider and subscriber, the Apex Court pointed out as follows: "119. It is not possible to interpret the contract between the service provider and the subscriber that the consensus was to mutilate the integrity of contract as a transfer of right to use goods and rendering service. Such a mutilation is not possible except in the case of deemed sale falling under sub clause (b). Nor can the service element be disregarded and the entirety of the transaction be tre....
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....e rigs owned by the contractor and going by the decision referred to above, we have no hesitation in accepting the assessee's case. 19. The assessee in the Karnataka case had entered into a Charter party agreement with New Mangalore Port Trust agreeing to make available the services of the tug for the purposes mentioned in the agreement along with the master and other personnel of the appellant to the port trust for a period of six months. For a plea made by the assessee before the High Court that the provisions of Section 5-C of the Karnataka Sales Tax Act, did not apply to the transactions in question, the Karnataka High Court pointed out to the terms of the agreement that the tug was placed at the disposal of the port trust, who had control over the tug. Going by the various stipulations in the agreement, the High Court came to the conclusion that there was a transfer of the tug by the assessee to the port trust. Thus, the High Court came to the conclusion that the transactions in question amounted to deemed sale on transfer of right to use. The said decision arrived at not only after noting the decision of the Apex Court referred in the preceding paragraph, but by referr....