IMPORTANT POINT
Sale of goods – A necessary ingredient of sale of goods is transfer of property in goods subject matter of sale from seller to buyer – Only because a person is allowed to use certain goods of owner, per se, there is no transfer of right to use any goods.

JUDGMENT :

ABHAY S. OKA, J.

FACTUAL ASPECTS

1. This group of appeals concerns the liability to pay tax under the Assam General Sales Tax Act, 1993 (for short, ‘the Sales Tax Act’) and the Assam Value Added Tax Act, 2003 (for short, ‘the VAT Act’), respectively. In some cases, in this group of appeals, the assessees have, under a contract, agreed to provide different categories of motor vehicles, such as trucks, trailers, tankers, buses, scrapping winch chassis, and cranes, to the Oil and Natural Gas Corporation Limited (for short, ‘ONGC’). There are other cases where Indian Oil Corporation Limited (for short, ‘IOCL’) has entered into agreements with transporters to provide tank trucks to deliver its petroleum products.

2. These cases have been clubbed together as similar questions of law and fact arise. Broadly, the question is whether, by hiring these motor vehicles/cranes, there is a transfer of the right to use any goods. If there is a transfer of the right to use the goods, it will amount to a sale in terms of Clause 29A(d) of Article 366 of the Constitution of India. In short, if the transactions do not fall in the definition of ‘Sale’ in Clause 29A(d), the same may not attract tax under the Sales Tax Act or the VAT Act. As a result, there will be other questions about whether the transactions will amount to service, thereby attracting liability to pay service tax.

3. We are referring to the facts in Civil Appeal No. 3548 of 2017 and Civil Appeal No. 383 of 2013 for convenience. The judgment dated 25th November 2009 subject matter of challenge in Civil Appeal no.3548 of 2017 is the main judgment. Most of the other impugned judgments directly or indirectly rely upon the said judgments. There are different impugned judgments and orders passed on 24th July 2012, 25th November 2009, 9th December 2009, 29th June 2010 and 25th August 2010. Civil Appeal no.3548 of 2017 arises from the impugned judgment dated 25th November 2009 passed by a Division Bench of the Gauhati High Court in a writ appeal. In this case, the agreement is of 13th April 2006, by which the appellant agreed to provide services of truck-mounted hydraulic cranes with crew, etc., to ONGC for carrying out its various operations. The appellant had to approach the High Court on the threat given by ONGC to deduct tax at source under the VAT Act in respect of the services provided by the appellant. Similar petitions were filed before the learned Single Judge of the Gauhati High Court. The learned Single Judge dismissed the petitions by holding that the contract was for the transfer of the right to use the goods and, therefore, there is a liability under the VAT Act and the Sales Tax Act. The learned Single Judge also passed orders in similar writ petitions disposing of the same in terms of the order dated 19th December 2006. Therefore, the appellants filed writ appeals before the Division Bench. By the impugned judgment dated 25th November 2009, the Division Bench dismissed the writ appeals by holding that under the agreements in question, there was a transfer of the right to use the goods covered by the contract.

SUBMISSIONS OF THE LEARNED COUNSEL APPEARING FOR THE APPELLANTS IN CIVIL APPEAL NO.3548 OF 2017 AND OTHER CONNECTED CASES

4. In Civil Appeal no.3548 of 2017 and other connected matters, i.e. Civil Appeal no.7954 of 2012, Civil Appeal no.8715 of 2012, Civil Appeal no.9291 of 2012, Civil Appeal no.3549 of 2017, Civil Appeal no.3550 of 2017, Civil Appeal no.3551 of 2017, Civil Appeal no.3552 of 2017, Civil Appeal no.3553 of 2017, Civil Appeal no.3555 of 2017, Civil Appeal no.3558 of 2017, Civil Appeal no.3559 of 2017, Civil Appeal no.3564 of 2017, Civil Appeal no.3565 of 2017, Civil Appeal nos.3566-3569 of 2017, Civil Appeal no.3570 of 2017 and Civil Appeal no.3571 of 2017, the learned counsel appearing for the appellants pointed out that the taxes on sale of goods and advertisements were covered by Entry 48 in List-II of the Seventh Schedule to the Government of Indi