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Judgment
J.K. Ranka, J.—This instant sales tax revision under section 86 of Rajasthan Sales Tax Act, 1994 is directed against the order Dt. 17.07.2008 passed by the Rajasthan Tax Board, Ajmer in Appeal No. 528/2007/Jaipur.
The brief facts which can be noticed are that the respondent is carrying on business of tent decoration and is inter-alia providing tent, furniture, crockery and electric decorative items to the consumers for the use in marriage functions, conferences and other related use.
The respondent-assessee moved an application under section 36 of the Rajasthan Value Added Tax Act, 2003 before Additional Commissioner (Law), for determining disputed questions: (i) whether an erection of pandal or shamiyana or tent including other accessories like carpet, sofa, chair, table, crockery, etc. which is essential service as a pandal or shamiyana''s contractor can be treated as sale as defined in section 2(35)(iv) of Rajasthan Vat Act, 2003; (ii) whether the activity of petitioner of providing service relating to tent, shamiyanas, pandal including other accessories is liable to tax under the provisions of Rajasthan VAT Act, 2003; (iii) if the answer of question No. 2 is in positive then what rate would be applicable under the VAT Act, 2003 and (iv) whether the activity of providing service of tent, pandal, shamiyanas as mentioned hereinabove is beyond the purview of the Rajasthan VAT Act and no tax is leviable on it.
The Additional Commissioner (Law) considering the language of section 2(35)(iv) of the VAT Act came to the conclusion that the same is liable to sale tax under the VAT Act.
The matter was carried in appeal by the respondent assessee before the Rajasthan Tax Board. After going into the facts of the case, decided the questions as such (i) if the tent contractor provides carpet, sofa, chair, table and crockery etc. to customer from his own business premises with the help of his labourers for a stipulated period the labourers of the contractor after some time brings back to the business premises of the assessee after its use then this act does not fall within the meaning of sale hence not taxable under the VAT Act (ii) if tent contractor made available tent, shamiyana, carpet, sofa, chair, table and crockery etc. from his business premises to customer and customer carries the same and after its use customer returns the same and delivers to the assessee at the business premises then it will fall within the definition of sale and is taxable under the VAT Act (iii) Since there was no exhaustive list available therefore, it was held that if the items do fall within the schedule then as per schedule V, the rate of tax would be payable @ 12.5% (iv) finally it concluded that answer to question No. 1 does not fall within the definition of sale but answer to question No. 2 falls within the definition of sale.
Instant petition was admitted on 02.09.2014 on the following question of law:
"Whether the renting out of tents, cutlery, furnitures and carpets by a "tent house" is covered by the definition of sale in Section 2(35)(IV) of the Rajasthan Value Added Tax Act, 2003 (hereinafter ''the Act of 2003'') and exigible to VAT levied under the Act of 2003." 7. Mr. Archit Bohra learned Counsel for the Revenue contended that the plain reading of section 2(35)(iv) of Rajasthan VAT Act, 2003 clarifies that a transfer of the right to use goods for any purpose for cash, deferred payment or other valuable consideration comes within the ambit of sale under the Vat Act. He contended that under section 2(35)(iv), it is not necessary that the property is actually transferred but even right to use, may be for limited period either for cash, deferred payment or other valuable consideration would fall within the ambit of sale. He further contended that the definition of sale given under section 2(35) is wide enough to cover even the items falling within the definition of sale in which the respondent assessee is dealing. He further contended that on the one hand the Tax Board comes to the conclusion that, if all the materials namely; tent, shamiyana, sofa, table, chair, crockery, etc. are being installed by the labourer/employees of respondent-assessee at the place directed by the customer it will not fall within the ambit of sale but the Tax Board further holds that if the customers carries aforesaid items from the business premises of the assessee to its destination on his own and later on returns back to the respondent-assessee, it will fall within the definition of sale. He contended that whether the customer carries on his own and returns back or the respondent-assessee sends for installation through its employees, does not make any difference as ultimately even the customers would be getting the same installed through someone. He contended that by and large, no customer is being permitted to carry the items and it is only under the control and supervision and the direction of the respondent-assessee that the items are being sent and are installed/placed according to the desire of the customers. He relied upon the judgment rendered in the case of Aggarwal Brothers Vs. State of Haryana and Another, .
No-one appeared on behalf of the respondent despite notice having been served on the respondent.
I have considered the arguments advanced by the ld. Counsel for the Revenue and have gone through the impugned order.
It would be apropos to quote section 2(35) of Rajasthan Value Added Tax, 2003 which reads as under:
"Section 2(35)
"sale" with all its grammatical variations and cognate expressions means every transfer of property in goods by one person to another for cash, deferred payment or other valuable consideration and includes-
(i) a transfer, otherwise than in pursuance of a contract, of property in goods for cash, deferred payment or other valuable consideration;
(ii) a transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract;
(iii) any delivery of goods on hire-purchase or other system of payment by instalments;
(iv) a transfer of the right to use goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration;
(v) a supply of goods by an unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration; and
(vi) a supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply shall be deemed to be a sale and the word "purchase" or "buy" shall be construed accordingly;"
On perusal of the above and specially sub clause (iv) of sec. 2(35) of RVAT Act, it prescribes that even transfer of the right to use goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration; can fall within the definition of sale. It also prescribes that transfer of property and goods could be from one person to another even for cash, deferred payment or other valuable consideration. The court is required to consider plain and simple meaning of sale as contained in section 2(35)(iv). In my view, the Tax Board on the one hand in reply to question No. 2 has expressed that if the customer carries tent, shamiyana, carpet, sofa, table chair and crockery etc. from the business premises of the respondent assessee on his own and after its use brings back and deposits the same with the respondent assessee at his business premises then it falls within the definition of sale under section 2(35)(iv). However the Tax Board has further come to the conclusion that, if the aforesaid items are being sent by the assessee through its own employees then it does not fall within the definition of sale, is not proper. In my view it would hardly make any difference in between the two propositions. If the dealer like the assessee sends for installation of Pandal, shamiyanas, kanats, sofa, table and crockery through its employees for installation as per desire by its customers and later on the employees of the respondent-assessee brings back the aforesaid items, it will not come within the purview of sale, in my view, is not correct as it does not make any difference as to whether the customer carries the goods on his own for installation and brings back the same through its labourers/employees or otherwise. In my view, there is hardly any distinction in between the two and it is one and the same thing. Very thin line of conclusion has been drawn by the Tax Board and in my view under both propositions it would certainly fall within the definition of sale.
Section 2(35)(iv) does not envisage a situation, that if the goods are being carried on by the customers it will come within the purview of sale or if the aforesaid items are sent by the respondent assessee to customers through its employees then it will not come within the ambit and definition of sale. The definition of sale is wide enough. It covers even goods transferred on short duration. The Hon''ble Apex Court in the case of Agarwal Brothers (supra) considering the case where shuttering material was provided by the dealer for use in construction of building for a limited period was held liable to sales tax as during intervening period it remained in the possession of builders, fell within the definition of "sale" as there was transfer of goods. It would be appropriate to quote paras 5 and 6 of the aforesaid judgment which reads ad infra:
"The said Act defines ''sale'' to mean the transfer of property in goods for cash or deferred payment or other valuable consideration and includes the "transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration." Such transfer of the right to use goods for consideration is "deemed" to be a sale. The provision expressly speaks of "transfer of the right to use goods" and not of transfer of goods. There is, therefore, no merit in the submission that to be a deemed sale within the meaning of the abovementioned provision of the said Act there must be a legal transfer of goods or that the transaction must be like a lease.
Where there is a transfer of a right to use goods for consideration, the requirement of the abovementioned provision of the said Act is satisfied and there is deemed to be a sale. In the instant case, the assessees owned shuttering. They transferred the shuttering for consideration to builders and building contractors for use in the construction of buildings. There can, therefore, be no doubt that the requirements of a deemed sale within the meaning of the abovementioned provision of the said Act are satisfied."
Language under the Haryana General Sales Tax vis a vis the definition under the Rajasthan VAT Act, 2003 which has been quoted hereinabove is identical and therefore the judgment rendered by the Apex Court supports the contention of the counsel for the revenue.
In view of the above, the revision petition succeeds and the order of Tax Board is hereby quashed and set aside. The question of law is answered in favour of the revenue and against the assessee.