Judgment

ALAGIRISWAMI, J. :- The very same question that arises in these three petitions, though from a different angle, was considered by this Court in an earlier litigation to which the petitioner was a party (Instalment Supply (P) Ltd. v. Union of India, (1962) 2 SCR 644. The question is when does a sale liable to sales tax take place under a hire-purchase agreement. On the earlier occasion it was the Delhi State that sought to tax certain transactions under hire-purchase agreements. In the present case it is the Gujarat State that has sought to tax certain transactions under certain hire-purchase agreements.

2. The petitioner is a limited company with its registered office in New Delhi. It carries on the business of financing the purchase of motor vehicles. The person desiring to purchase a motor vehicle enters into a hire-purchase agreement with the petitioner company. It may be useful to give within a short compass the terms of the agreement. The company charges the hirer an initial deposit by way of premium as a consideration for granting the lease of the vehicle, which deposit becomes the absolute property of the company, the premium charged as aforesaid is a substantial amou