Research › Search › Judgment

Allahabad High Court · body

2005 DIGILAW 1012 (ALL)

Jagannath Gautam v. Commissioner of Trade Tax

2005-05-20

body2005
E. PRAKASH KRISHNA, J. ( 1 ) THESE three revisions are against the common order of the Tribunal, Aligarh dated 12th of march, 1996 passed in three second appeals No. 121, 122 and 123 of 1995 for the assessment years 1990-91 to 1992-93. ( 2 ) COMMON question of law and facts are involved in all these revisions and they were heard together and are being disposed off by a common judgment. ( 3 ) THE applicant entered into a contract with Aligarh Milk Utpadak Sahkari Sangh Limited (hereinafter, referred to as Sahkakri Sangh) for transportation of milk from one place to other, secified places by means of contract, a copy of which has been enclosed as annexure -1. The said contract has been held by the three authorities below as transfer of right to use the transport vehicle within the meaning of Section 3f to U. P. Trade Tax Act. The case of the dealer opp. party is that under the contract right to use any goods was not transfer and it was merely a contract of transportation of milk from one point to another, therefore, the provisions of Section 3f of the Act are not applicable. ( 4 ) THE controversy, thus, centers round on the question of nature of the contract dated 15. 5. 1990 entered into by the applicant with the Aligarh Milk Utpadak Sahkari Sangh Limited. On a reading of the aforesaid contract the essential terms and conditions of the contract so far as it relates to the controversy in hand are briefly stated as follows:under condition No. 1 a contract to transport milk for a period of one year was granted in favour of the dealer. The period could be extended for further a period of three months for which the dealer shall be liable to operate the vehicle failing which the security amount shall be forfeited. The condition No. 2 provides that the dealer shall transport the milk twice in a day on the prescribed route and will ensure the safe return of empty cans. Under Condition No. 7 the dealer applicant will make available the vehicle 15 minutes in advance failing which he shall be liable to pay a penalty as well as the damages. The condition No. 2 provides that the dealer shall transport the milk twice in a day on the prescribed route and will ensure the safe return of empty cans. Under Condition No. 7 the dealer applicant will make available the vehicle 15 minutes in advance failing which he shall be liable to pay a penalty as well as the damages. Under condition No. 9 if there is a call of strike by truck union or otherwise, the dealer applicant shall make alternative arrangement for transportation of the milk. Similarly the dealer shall be liable for the damages if caused to the milk due to the break down of the vehicle. The dealer opp. party shall not be authorised to carry any passenger or any other goods while transporting the milk without prior permission of the Sahkari Samiti. Under condition No. 15 all the expenses such as salary of the employee, diesel, taxes, insurance, maintenance etc. shall be borne by the dealer applicant. Under the condition No. 20 the dealer opp. party shall be entitled for a sum of Rs. 2. 50 per kilo meter on the actual travelling of the transport vehicle. ( 5 ) THESE conditions show that the possession of the transport vehicle will remain with the dealer applicant. The dealer applicant undertook to transport the milk of Sahkari Sangh from one point to another on payment of certain charges under the direction and control of the Sahkari Sangh. The charges will be measured in the terms of distance actually travelled. ( 6 ) FURTHER a bare perusal of the various terms and conditions of the aforesaid contract show beyond doubt that it was essentially a contract to transport the milk, from one point to another. It was not a case of transfer of transport vehicle and its use. The transport vehicle remained under the control of the dealer opp. party in as much as it has to employ the driver and other staff for its running and was made liable to get the vehicle insured and pay the road tax, goods tax and salary of the driver and cleaners etc. The Tribunal misconstrued the terms and condiuons of the above contract and it has wrongly reached to the conclusion that there was transfer of right to use the transport vehicle. The Tribunal misconstrued the terms and condiuons of the above contract and it has wrongly reached to the conclusion that there was transfer of right to use the transport vehicle. ( 7 ) A Division Bench of this Court in the case of Ahuja Goods Agency and Anr. v. State of u. p. 1997 U. P. T. C 629 has held that transportation of goods does not amount to transfer of right to use any goods. Trucks used for carrying on the goods from one place to another, the custody of trucks remained with the owner and only transportation charges for transportation of goods were paid. There was no transfer of right to use any specified vehicle. Therfore, it was hold, that the transportation charges were not taxable. The vehicle remained in the custody of the owner through drivers. The controversy in hand is squarely covered by the aforesaid judgment of this court. ( 8 ) IN the result the common order of the Tribunal for three assessment years in question cannot be sustained and the same is hereby set aside. The revisions are allowed and it is held that the transportation chargers were not liable to be taxed under Section 3f of the Act. No order as to costs. . .