JUDGMENT

Kirpal, J.-The only question which arises for consideration in all these cases is: Whether the respondents were justified in holding that hire purchase transactions entered into by the appellants were liable to imposition of sales tax on the consolidated proceeds?

2. The appellants carry on the business of hire purchase. They enter into agreements with hirers for the purpose of enabling the hirers to obtain a vehicle. The normal term of the agreement entered into between a hirer and the appellant contemplates a vehicle being purchased by the appellant and the said vehicle is then taken by the hirer on hire purchase basis. The terms of the agreement provide that on the execution of the hire purchase agreement an initial amount is paid by the hirer by way of premium for granting a lease and thereafter regular instalments are required to be paid. The amount which is paid by the hirer would include the price of the vehicle and the hire purchase charges. As and when all the instalments are paid, the hirer is given an option to obtain the ownership of the vehicle on the payment of a nominal amount. On the payment being so made, the vehicle is transferred in the name of the hirer.

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