I.A. Ansari, J.

1. The case of the petitioner-company may, in brief, be described thus:

(i) The petitioner, a public limited company, is engaged in the business of sale and supply of petroleum products inside as well as outside the State of Assam. The petitioner-company's case is that it hires trucks/tankers for delivery of petroleum to its dealers and, in course of its business, the petitioner-company enters into agreement with contractors as regards its hiring of trucks/tankers on various terms and conditions. The petitioner-company pays to the contractors hire charges for using the trucks/tankers specified in the Schedule attached to the respective agreements. As per the agreements, the contractors are liable to bear and pay the entire cost of the trucks/tankers, given on hire to the petitioner-company, including maintenance, repairing, insurance, fuel and salaries to the drivers, cleaners, etc. The petitioner-company does not guarantee the minimum mileage for each vehicle, which it obtains on hire, and it does not guarantee the minimum number of vehicles, which it may utilize per month. There is, thus, according to the petitioner-company, no transfer of the right to use vehicles from the contractors to the petitioner-company inasmuch as possession and custody of the vehicles remain, for all practical purposes, with the contractors and the petitioner-company pays only the hire charges to the contractors for the vehicles hired from them.

(ii) However, the Senior Superintendent of Taxes, Bongaigaon, issued a notice, dated May 16,1998, addressed to the petitioner-company's plant manager, who is in-charge of the LPG bottling plant, directing him to deduct tax under Section 27(a) of the Assam General Sales Tax Act, 1993, (in short, "the Act") on payment of hire charges to the contractors, who are owners of vehicles hired by the petitioner-company. This was followed by yet another notice, dated May 15,1998, issued by the Senior Superintendent of Taxes, Bongaigaon, directing the petitioner-company's plant manager to show cause as to why penal action shall not be taken for failure to furnish the particulars relating to payment of hire charges to the owners of the public vehicles by the petitioner-company and deduction of tax as had been directed by the letter dated May 16, 1998, aforementioned. This was followed by a notice, dated June 4, 1998, issued by the Senior Superintendent of Taxes, Bongaigaon, directing the petitioner-company's plant manager to deduct tax at source with immediate effect, on the hire charges paid to the owners of the vehicles treating the use of the vehicles, on the basis of hire charges, by the petitioner-company, as lease.

(iii) The petitioner-company has put to challenge the jurisdiction, authority, legality and correctness of the letter, dated May 16,1998, aforementioned, whereby the petitioner-company was directed to deduct at source tax, in terms of Section 27(a) of the Act, from the owners of the vehicles and also the notice, dated May 15,1998, directing the petitioner-company to show cause as to why penal action shall not be taken as indicated hereinbefore and also the notice, dated June 4,1998, whereby the demand for making of deduction, at source, with immediate effect, was reiterated.

2. The respondents have resisted the writ petition by contending, inter alia, that the act of hiring of the vehicles for delivery of petroleum products by the petitioner-company to its dealers amounts to transfer of the right to use the vehicles and such transfers, within the meaning of Section 2(19), constitute lease and has become and therefore, amenable to tax under the Act. The respondents also contend that such transfers of the right to use the vehicles constitute "sale" within the definition of the ambit of "sale" as embodied in Section 2(33) of the Act and are, therefore, assessable to sales tax under the Act.

3. In order to substantiate its case that hiring of the vehicles amounts to transfer of the right t