TaxTMI 
TaxTMI 
2015 (3) TMI 259
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..... for transfer of right to use certain machines. The dealer for discharge of his contractual obligation imported certain machines for M/s Mafat Lal Micro Machin Ahamdabad and leased out the same to M/s M.M. Plastics Private Ltd., on a quarterly lease rent of Rs. 545837/-. In the assessment year 1999-00 dealer received Rs. 2210640/- towards lease rent. It claimed exemption from tax on the aforesaid amount/rent under Section 3F of the Central Sales Tax Act, 1956 (hereinafter referred to as "Act 1956"). The assessing authority took the view that the contract for transfer of right to use machines was executed at Kanpur, which is a separate transaction, and import of machine from outside of the State is a separate transaction. The dealer transfe....
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.... sold by the Postal Department." 7. Similarly definition of 'dealer' is contained in Section 2(c) which includes a person who carries on the business of transfer of right to use any goods relevant for the purpose of this case reads as under: (c)'Dealer' means any person who carries on in Uttar Pradesh (whether regularly or otherwise) the business of buying, selling, supplying or distributing goods directly or indirectly, for cash or deferred payment or for commission, remuneration or other valuable consideration and includes- (i) ............... (ii) .......... (viii) every person who carries on business of transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash,....
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....any transfer on hire purchase or any system of payment by instalments; (p)"lessee" means any person to whom the right to use any goods for any purpose is transferred under a lease; (q)"lessor" means any person by whom the right to use any goods for any purpose is transferred under a lease." 11. Then Section 3-F deals with the tax on the right to use any goods involved in the execution of its contract. Sub-section (1) and 2(a) of Section 3-F which are relevant in this case are reproduced as under: "3-F. Tax on the right to use any goods or goods involved in the execution of works contract-(1) Nothwithstanding anything contained in Section 3-A or Section 3-AAA or Section 3-D but subject to the provisions of Sections 14 and 15 of t....
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....r, this aspect has been considered by a Constitution Bench of Apex Court with respect to similar statutes of various States including the State of U.P., Therefore, it would be useful to look into the aforesaid decision, namely, 20th Century Finance Corporation Ltd. and another Vs. State of Maharashtra, AIR 2000 SC 2436. After addressing entire history of certain amendments in the constitution, as also State Legislation in respect of sale or purchase of goods, the Court observed that, by virtue of entry 92-A, List 1, Seventh Schedule of the Constitution, the Parliament has power to legislate in regard to taxes on sales or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or co....
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.... the goods are sold or delivered, and (4) where the essential ingredients which complete a sale, are found in majority. 14. The Court held, where the situs of sale has been provided by legal fiction created by State Legislature, there is no difficulty. However, in the Act 1956 since Parliament has not fixed location of sale in case of transfer of right to use, by creating any fiction, that situation is not available. In the circumstances, the Court proceeded to find out answer in view of various binding precedents on the subject as discussed above. 15. Referring to its earlier decision in Indian Copper Corporation Limited Vs. State of Bihar, AIR 1961 SC 347 and A.V. Thomas and Co. Ltd. Vs. Deputy Commissioner of Agricultural Income Ta....