TaxTMI 
TaxTMI 
2016 (1) TMI 888
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....hort) in respect of certain capital assets. Interpreting the said agreement, the revenue was of the view that allowing use of such capital assets amounts to providing of services, namely, "supply of tangible goods" service. The notice demanded service tax on the amounts received by appellant in respect of asset licensing agreement. The appellants were of the view that they are liable for tax under Sales Tax regime and discharged their liability accordingly. They were of the opinion that consequent upon 46th amendment, Article 366 (29A)(d) of the Constitution of India defines that "tax on sale or purchase of goods" includes a tax on the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, d....
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....is said that the property in the goods passes to the purchaser. In a lease of immovable property, there is a transfer of a right to enjoy such property; "a lease of land and a bailment of chattels are transactions of essentially the same nature." (Salmond on Jurisprudence - Twelfth Edition at page 424) Section 148 of the Contract Act defines "bailment" in the following terms: "148. 'Bailment', 'bailor' and 'bailee' defined. - A bailment' is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. The person delivering the goods is calle....
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....mon use of the word 'transfer' is to denote the passing of title in property, or an interest therein, from one person to another, and in this sense the term means that the owner of property delivers is to another person with the intent of passing the rights which he had it to the latter." (Corpus Juris Secundum, Vol. 87, page 892.) 9. The essence of transfer is passage of control over the economic benefits of property which results in terminating rights and other relations in one entity and creating them in another. While construing the word "transfer" due regard must be had to the thing to be transferred. A transfer of the right to use the goods necessarily involves delivery of possession by the transferor to the ....
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....es:- a. There must be goods available for delivery; b. There must be a consensus ad idem as to the identify of the goods; c. The transferee should have a legal right to use the goods consequently all legal consequences of such use including any permission or licenses required therefore should be available to the transferee; d. For the period during which the transferee has such legal right, it has to be the exclusion to the transferor this is necessary" concomitant of the plain language of the statute - viz. a "transfer of the right to use" and not merely a license to use the goods; e. Having transferred the right to use the goods during the period for which it is to be transferred, the owner can....