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Rajasthan High Court · body

2007 DIGILAW 1444 (RAJ)

State of Rajasthan v. R. V. P. N. Ltd.

2007-07-31

R.M.LODHA, R.S.CHAUHAN

body2007
JUDGMENT 1. The State of Rajasthan through the Commissioner, Commercial Taxes, Rajasthan, Jaipur and the Assistant Commissioner, Works Contract and Leasing Tax Zone-II, Jaipur, have approached this court under Article 226 of the Constitution of India by challenging the judgment of the Rajasthan Taxation Tribunal, Jaipur passed on April 27, 1998 whereby the said Tribunal held that the supply of the meter by the Rajasthan State Electricity Board (for short 'the Board') to the consumer to measure the energy supplied to him for the purpose of billing at monthly rent is not a sale exigible to tax under the Rajasthan Sales Tax Act, 1954 ('the Act of 1954' for short) and Rajasthan Sales Tax Act, 1994 ('the Act of 1994' for short) and the notifications issued therein. 2. The Assistant Commissioner, Works Contract and Leasing Tax Zone-II, Jaipur (petitioner No. 2) held that the Board was involved in the business of hiring Meters and as it involved the transfer of right to use for a consideration, the transaction was a 'sale'. The Assessing Officer held that the Board's meter was an electrical equipment and was liable to tax under the notification dated 27.6.1990 as amended from time to time and directed the Board to register it as a 'dealer'. By the order dated 12.6.1997, the Assessing Officer imposed the penalty. On that very day i.e. 12.6.1997, the Assessing Officer issued an assessment notice for the assessment years 1990-91, 1991-92, 1992-93, 1993-94, 1994-95, 1995-96 and 1996-97. 3. The aforesaid order as well as the notice issued by the Assistant Commissioner, Works Contract and Leasing Tax Zone-II, Jaipur were challenged by the Board before the Rajasthan Taxation Tribunal, Jaipur by making an application under Section 8 of the Rajasthan Taxation Act, 1995. 4. By the forty sixth amendment, Article 366 of the Constitution of India was amended and clause 29A was inserted therein. The newly Clause 29A in Article 366 reads thus : 29A. 4. By the forty sixth amendment, Article 366 of the Constitution of India was amended and clause 29A was inserted therein. The newly Clause 29A in Article 366 reads thus : 29A. "Tax on the sale or purchase of goods" includes- (a) a tax on the transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration; (b) a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract; (c) a tax on the delivery of goods on hire-purchase or any system of payment by instalments; (d) a tax on 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; (e) a tax on the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration; (f) a tax on the 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 or service, is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made." 5. Consequent upon the Constitution amendment in Article 366, Section 2(o) of the Rajasthan Sales Tax Act, 1954 was amended. Consequent upon the Constitution amendment in Article 366, Section 2(o) of the Rajasthan Sales Tax Act, 1954 was amended. The definition of 'sale' in Section 2 (o) of the Act of 1954 after amendment reads thus : "2(o) : "Sale" with all its grammatical variation and cognate expression, means every transfer of the property in goods (other than by way of mortgage, hypothecation, charge or pledge) by one person to another for cash or 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 2(XXX) work-contract; (iii) A delivery of goods on hire-purchase or other system of payment by instalment; (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 any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration; (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 intoxication), 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 work "purchase" or 'buy' shall be construed accordingly. [Explanation-1]. The transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract shall be deemed to take place within the State of Rajasthan if the goods are within the State at the time of their appropriation or application or use for the execution of the works contract irrespective of the place where the agreement for such works is made or from where the goods are transferred or delivered for use in the works contract. Explanation-II. Explanation-II. Where the work under a works contract is spread over many states including the State of Rajasthan, the proportionate work done within the State of Rajasthan shall be deemed to be the sale under this clause irrespective of the place of agreement for works or the point or movement of goods involved in the execution of that works contract." 6. Where the work under a works contract is spread over many states including the State of Rajasthan, the proportionate work done within the State of Rajasthan shall be deemed to be the sale under this clause irrespective of the place of agreement for works or the point or movement of goods involved in the execution of that works contract." 6. Similarly clause 38 of Section 2 of the Sales Tax Act, 1994 defines the 'sale' thus : "2(38) : "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 person 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 work "purchase" or "buy" shall be construed accordingly; Explanation-I.-Notwithstanding anything contained in this Act, where any goods are sold in packing, the packing material in such case shall be deemed to have been sold with the goods, unless otherwise proved by the dealer; Explanation-II.-A sale or purchase shall be deemed to take place inside the State- (a) in a case falling under sub-clause (II), if the goods are in the State at the time of their use, application or incorporation in the execution of a works contract, notwithstanding that the agreement for the works contract has been wholly or in part entered into outside the State or that the goods have been wholly or in part moved from outside the State; and (b) in a case falling under sub-clause (iv), if the goods are used by the lessee within the State, whether or not for a specified period, notwithstanding that the agreement for the lease has been made outside the State or that the goods have been moved from outside the State or the goods have been delivered to the lessee outside the State; Explanation-III.-Where there is a singly contract of sale or purchase in respect of goods stored or ascertained in the State as well as at places outside the State, the goods stored or ascertained in the State shall be deemed sold separately in or from the State; Explanation-IV.- Where the work under a works contract is spread over in many States including the State of Rajasthan, the part of the work done within this State shall be deemed to be the sale made in the State, irrespective of the place of agreement for works or the point of movement of goods involved in the execution of that works contract; 7. By the definition of 'sale' and Section 2(o) of the Act of 1954 and Section 2(38) of the Act of 1994, a transfer of the right to use goods for any purpose for cash, deferred payment or other valuable consideration is exigible to sales-tax in the State of Rajasthan. 8. Section 26 of the Indian Electricity Act makes the provision for meters. The meter is for measuring the amount of energy supplied to the consumer. The said provision reads thus : "26 Meters.- (1) In the absence of an agreement to the contrary, the amount of energy supplied to a consumer or the electrical quantity contained in the supply shall be ascertained by means of a correct meter, and the licensee shall, if required by the consumer, cause the consumer to be supplied with such a meter: Provided that the licensee may require the consumer to give him security for the price of a meter and enter into an agreement for the hire thereof, unless the consumer elects to purchase a meter. (2) Where the consumer so enters into an agreement for the hire of a meter, the licensee shall keep the meter correct, and, in default of his doing so, the consumer shall, for so long as the default continues, cease to be liable to pay for the hire of the meter. (3) Where the meter is the property of the consumer, he shall keep the meter correct and, in default of his doing so, the licensee may, after giving him seven days' notice, for so long as the default continues, cease to supply energy through the meter. (3) Where the meter is the property of the consumer, he shall keep the meter correct and, in default of his doing so, the licensee may, after giving him seven days' notice, for so long as the default continues, cease to supply energy through the meter. (4) The licensee or any person duly authorised by the licensee shall, at any reasonable time and on informing the consumer of his intention, have access to and be at liberty to inspect and test, and for that purpose, if he thinks fit, take of and remove, any meter referred to in sub-section (1); and, except where the meter is so hired as aforesaid, all reasonable expenses of, an incidental to, such inspecting, testing, taking off and removing shall, if the meter is found to be otherwise than correct, be recovered from the consumer; and, where any difference or dispute arise as to the amount of such reasonable expenses, the matter shall be referred to an [Electrical Inspector], and the decision of such Inspector shall be final; Provided that the licensee shall not be at liberty to take off or remove any such meter if any difference or dispute of the nature described in sub-section (6) has arisen until the matter has been determined as therein provided. (5) A consumer shall not connect any meter referred to in sub-section (1) with any electric supply-line through which energy is supplied by a licensee, or disconnect the same from any such electric supply-line [but he may by giving not less than forty-eight hours' notice in writing to the licensee requires the licensee to connect or disconnect such meter and on receipt of any such requisition the licensee shall comply with it within the period of the notice]. (6) Where any difference or dispute arises as to whether any meter referred to in sub-section (1) is or is not correct, the matter shall be decided, upon the application of either party, by an Electrical Inspector; and where the meter has, in the opinion of such Inspector ceased to be correct, such Inspector shall estimate the amount of the energy supplied to the consumer or the electrical quantity contained in the supply, during such time, not exceeding six months, as the meter shall not, in the opinion of such Inspector, have been correct; but save as aforesaid, the register of the meter shall, in the absence of fraud, be conclusive proof of such amount or quantity; Provided that before either a licensee or a consumer applied to the Electrical Inspector under this sub-section, he shall give to the other party not less than seven days' notice of his intention so to do.] (7) In addition to any meter which way be placed upon the premises of a consumer in pursuance of the provisions of sub-section (1), the licensee may place upon such premises such meter, maximum demand indicator or other apparatus as he may think fit for the purpose of ascertaining or regulating either the amount of energy supplied to the consumer, or the number of hours during which the supply is given, or the rate per unit of time at which energy is supplied to the consumer, or any other quantity or time connected with the supply: Provided that the meter, indicator or apparatus shall not, in the absence of an agreement to the contrary be placed otherwise than between the distributing mains of the licensee and any meter referred to in sub-section (1): Provided also that, where the charges for the supply of energy depend wholly or partly upon the reading or indication of any such meter, indicator or apparatus as aforesaid, the licensee shall, in the absence of an agreement to the contrary, keep the meter, indicator or apparatus correct; and the provisions of sub-section (4), (5) and (6) shall in that case apply as though the meter, indicator or apparatus were a meter referred to in sub-section (1). Explanation.- A meter shall be deemed to be "correct" if it registers the amount of energy supplied, or the electrical quantity contained in the supply, within the prescribed limits of error, and a maximum demand indicator or other apparatus referred to in sub-section (7) shall be deemed to be "correct" if it complies with such conditions as may be prescribed in the case of any such indicator or other apparatus." 9. Section 44 of the Indian Electricity Act, 1910 provides for penalty in the case of interference with meters or licensee's works and for improper use of energy. Section 44 of the Act of 1910 is as follows : "44. Penalty for interference with meters of licensee's works and for improper use of energy. Section 44 of the Indian Electricity Act, 1910 provides for penalty in the case of interference with meters or licensee's works and for improper use of energy. Section 44 of the Act of 1910 is as follows : "44. Penalty for interference with meters of licensee's works and for improper use of energy. - whoever - (a) connects any meter referred to in section 26, sub-section (1), or any meter, indicator or apparatus referred to in section 26, sub-section (7), with any electric supply-line through which energy is supplied by a licensee, or disconnects the same from any such electric supply-line; or [(aa) unauthorisedly re-connects any meter referred to in sub-section (1) of section 26, or any meter, indicator or apparatus referred to in sub-section (7) of section 26, with any electric supply-line or other works, being the property of the licensee, through which energy may be supplied, when the said electric supply line or other works has or have been cut or disconnected under sub-section (1) of section 24; or] (b) lays, or cause to be laid, or connects up any works for the purpose of communicating with any other works belonging to a licensee; or (c) maliciously injures any meter referred to in section 26, sub-section (1), or any meter, indicator or apparatus referred to in section 26, sub-section (7), or wilfully or fraudulently alters the index of any such meter, indicator or apparatus, or prevents any such meter, indicator or apparatus from duly registering; or (d) improperly uses the energy of a licensee, [shall be punishable with imprisonment for a term which may extend to three years, or with "fine which may extend to five thousand rupees, or with both], and, in the case of a continuing offence, with a daily fine which may extend to [fifty] rupees; and [if it is proved that any artificial means exists] for making such connection as is referred to in clause (a) [or such re-connection as is referred to in clause (aa), or such communication as is referred to in clause (b), or for causing such alteration or prevention as is referred to in clause (c), or for facilitating such improper use as is referred to in clause (d), [and that] the meter, indicator or apparatus is under the custody or control of the consumer, whether it is his property or not [it shall be presumed, until the contrary is proved] [that such connection, reconnection, communication], alteration, prevention or improper use, as the case may be, has been knowingly and wilfully caused by such consumer." 10. The Electricity (Supply) Act, 1948 (Act 54 of 1948) was enacted to provide for the rationalisation of the production and supply of electricity, for taking measures conducive to [electrical development] and for all matters incidental thereof. Section 79 thereof empowers the Electricity Board to make regulations not inconsistent with this Act, by notification in the Official Gazette. The power of making regulations conferred under Section 79 is in the nature of delegated legislation. In exercise thereof, the Rajasthan State Electricity Board issued a notification way back in the year 1964 known as the "General Conditions of supply and scale of Miscellaneous charges relating to the supply of electricity". The "Consumer" inter alia means the owner or occupier of the premises which are for the time being connected for supply of electrical energy with the Board's distribution system. The format of the application, requisition and agreement form for an electric connection inter alia has the following clause : "2(c) I/We further require the Board to supply me/us necessary Meters on hire for measuring the quantity of electrical energy supplied and I/We shall be solely responsible for any loss or damage to the Board's Meters and other apparatus installed at my/our premises." 11. Paragraph 9 of the General Conditions of Supply deals with mains and apparatus, and clauses (d) and (e) thereof read thus : "(d) Every consumer shall compensate the Board for any damage and cost of making good any damage caused to the mains, apparatus or instruments or any other property of the Board in the consumer's premises occasioned by reasons of any act, neglect or default of the consumer or his servants or persons employed by him and in addition shall pay such penalties prescribed or lawfully due to the Board for continued unauthorized interference with the Board's property or seals. (e) The Board shall have the right to use mains and apparatus provided under condition (a) and (b) above for supply to other premises in the neighbourhood, provided the supply to the consumer is not thereby adversely affected. Permission to lay cables under, across, over or through the consumer's premises or for fixing apparatus upon the said premises by the Board shall be deemed to be implied and vested in the Board." 12. Paragraph 19 of the General Conditions of Supply is in respect of Meters and their installation. Permission to lay cables under, across, over or through the consumer's premises or for fixing apparatus upon the said premises by the Board shall be deemed to be implied and vested in the Board." 12. Paragraph 19 of the General Conditions of Supply is in respect of Meters and their installation. Paragraph 19(a)(i) and (b) to the extent they are relevant, are as follows : "19(a)(i) Accuracy of the amount of energy supplied to a consumer shall be ascertained by means of a correct meter which may be hired from the Board or purchased by the consumer at the later's option. In the latter case, the make and type of the meter shall be subject to the approval of the Board. Where the meter is hired from the Board, the Board shall keep the meter correct and the default of its doing so the consumer shall for so long as the default continues, cease to be liable to pay for the hire of the meter. (b) Installation of: The Board shall supply a meter, if required by the consumer, to measure the energy supplied to him for the purpose of billing, at a monthly rental as laid down in the Schedule of Miscellaneous Charges. Having agreed to take the Board's meter or rental, the consumer shall not be entitled to have his own meter during the period of contract and the consumer shall be liable to pay the rental charges every month till the expiry of the contract. If the consumer elects to have his own meter to start with and subsequently requests the Board to provide the meter, the same shall be provided by the Board with the least possible delay but the entire cost of labour and material in effecting the change plus 15% to cover overhead charges shall be payable by the consumer and thereafter the consumer shall be liable to pay the standard rental charges for the meter every month till the expiry of the contract. Meters will ordinarily be installed at the point of entry to the building." 13. Whether there is a transfer of the right to use or not, is a question of fact which has to be determined in each case having regard to the terms of the contract under which there is said to be a transfer of the right to use. 14. Whether there is a transfer of the right to use or not, is a question of fact which has to be determined in each case having regard to the terms of the contract under which there is said to be a transfer of the right to use. 14. However, we shall first refer to the judgments cited at bar by the counsel for the parties in support of their respective view. 15. The tax leviable under Section 5-E of the Andhra Pradesh General Sales Tax Act, 1957 on the hire charges collected by a person on supply of machinery for execution of work under contract, came up for consideration before the Division Bench of Andhra Pradesh High Court in the case of Rashtriya Ispat Nigam Limited v. Commercial Tax Officer, Company Circle, Visakhapatnam- 1990(77) STC 182 . The Andhra Pradesh High Court referred to the "Salmond on Jurisprudence", Section 148 of the Indian Contract Act, Halsbury's Law of England (Fourth Edition) and Corpus Juris Secundum, for proper appreciation of the term "transfer" and 'right to use'. The facts before the Andhra Pradesh High Court in the case of Rashtriya Ispat Nigam Ltd. were that Rashtriya Ispat Nigam Ltd. owning Visakhapatnam Steel Project, for the purpose of the steel project, allotted different works of the project to the contractors. To facilitate the execution of work by the contractors with the use of sophisticated machinery, it supplied the machinery to the contractors for the purpose of being used in the execution of the contracted works and received charges for the same. The Commercial Tax Officer made provisional assessment levying tax on the hire charges under Section 5-E of the Andhra Pradesh General Sales Tax Act, 1957 This was challenged by the Rashtriya Ispat Nigam Limited by filing a writ petition before the Andhra Pradesh High Court. The Andhra Pradesh High Court held that the agreement has to be read as a whole in order to determine the nature of the transaction. It was further held that the contractor was entitled to make use of the machinery for the purpose of execution of the works of Rashtriya Ispat Nigam and there was no transfer of the right to use it as such in favour of the contractor. It was further held that the contractor was entitled to make use of the machinery for the purpose of execution of the works of Rashtriya Ispat Nigam and there was no transfer of the right to use it as such in favour of the contractor. While reaching this conclusion, the Andhra Pradesh High Court noticed that the effective control of the machinery, even while the machinery was in the use of the contractor, was that of Rashtriya Ispat Nigam and that the contractor was not free to make use of the same for other works or move it out during the period the machinery was in his use. 16. The Judgment of Andhra Pradesh High Court in Rashtriya Ispat Nigam came to be challenged before the Supreme Court by the State of Andhra Pradesh and the Commercial Tax Officer. The Supreme Court in its decision reported in (2002) 3 SCC 314 -State of A.P. And another v. Rashtriya Ispat Nigam Ltd. , found no fault with the judgment of Andhra Pradesh High Court. In para No. 4 of the report, the Supreme Court observed thus : "4. The High Court after scrutiny and close examination of the clauses contained in the agreement and looking to the agreement as a whole, in order to determine the nature of the transaction, concluded that the transactions between the respondent and contractors did not involve transfer of right to use the machinery in favour of the contractors and in the absence of satisfying the essential requirement of Section 5-E of the Act i.e. Transfer of right to use machinery, the hire charges collected by the respondent from the contractors were not exigible to sales tax. On a careful reading and analysis of the various clauses contained in the agreement and, in particular, looking to clauses 1, 5, 7, 13 and 14, it becomes clear that the transaction did not involve transfer of right to use the machinery in favour of contractors. The High Court was right in arriving at such a conclusion. On a careful reading and analysis of the various clauses contained in the agreement and, in particular, looking to clauses 1, 5, 7, 13 and 14, it becomes clear that the transaction did not involve transfer of right to use the machinery in favour of contractors. The High Court was right in arriving at such a conclusion. In the impugned order, it is stated, and rightly so in our opinion, that the effective control of the machinery even while the machinery was in the use of the Contract was that of the respondent company; the contractor was not free to make use of the machinery for the works other than the project work of the respondent or move it out during the period of machinery was in his use; the condition that the contractor would be responsible for the custody of the machinery while it was on the site did not militate against the respondent's possession and control of the machinery. It may also be noticed that even the Appellate Deputy Commissioner, Kakinada in the order dated 15.11.1999 in regard to Assessment Year 1986-87 held that under the terms and conditions of the agreement, there was no transfer of right to use the machinery in favour of the contractor. Although it cannot be said that the appellant was estopped from contending otherwise in regard to Assessment Year 1988-89, it is an additional factor and circumstance, which supports the stand of the respondent." 17. In the case of State of U.P. and Another v. Union of India and Another- (2003) 3 SCC 239 , the question that arose for consideration was whether the rentals collected by the Department of Telecommunication (DoT) from the subscriber for the transfer of right to use the telephone system under the provisions of the U.R Trade Tax Act, 1948 were taxable or not? While dealing with the said question, the Supreme Court noticed various provisions of the U.R Trade Tax Act, 1948 including the definitions of terms "business", 'goods', 'dealer' and 'sale' and held that the telephone connection and all others accessories which give access to the telephone exchange with or without instruments are "goods" within the meaning of Section 2(d) of the U.R Act. Dealing further with the question as to whether the supply of telephone connection involves a transfer of right to use any goods or amount or providing any service, the Supreme Court held thus : "26. It was then urged that in providing telephone service by DoT, installation of instrument/apparatus and appliances is insignificant and in many cases subscribers themselves have their own instruments; the more important part is access to the area exchange and the whole system connected thereto without which the installation is of no consequence and the same remains under the possession and full control of DoT so there was no transfer of the right to use any goods so as to attract liability under the U.P Act. We are not persuaded to accept this submission. It is true that under the Rules, referred to above, as service, a number is allotted, an instrument/apparatus and other appliances are installed at the premises of a subscriber and the same are connected with the area exchange to enable him to have access to the whole system, to dial and to receive calls. In our view, it makes no difference whether any subscriber replaces thing is the connection of the subscriber's telephone number with the area exchange and that was provided by DoT. Insofar as the contention of giving possession or control of the whole system of exchange is concerned, which is said to compromise mostly of immovable property, it needs to be borne in mind that handing over of the possession is not sine qua non of completing the transfer of the right to sue any goods. It was so held by a Constitution Bench of this Court in 20th Century Finance Corpn. Ltd. v. State of Maharashtra. A "transfer of the right of use any goods'' will be complete according to the law laid down by the majority in that case, on completion of the contract to transfer of the right to use the goods. The contention that the area telephone exchanges and other system would remain under the control of DoT, is irrelevant to complete such a transfer. Even otherwise, after installation of the instrument and other appliances, once DoT connects the telephone line of the assigned number of the subscriber to the area exchange, access to other telephones is established. The contention that the area telephone exchanges and other system would remain under the control of DoT, is irrelevant to complete such a transfer. Even otherwise, after installation of the instrument and other appliances, once DoT connects the telephone line of the assigned number of the subscriber to the area exchange, access to other telephones is established. There cannot be denial of the fact that giving such an access would complete the transfer of the right to use the goods. However, reliance is placed on the decision of the High Court of Andhra Pradesh in Rashtriya Ispat Nigam Limited v. CTO which was affirmed by this Court in State of A.P. v. Rashtriya Ispat Nigam Ltd. . It is unnecessary to deal with these cases in any detail; suffice it to say, in that case there was a finding of fact that the transaction did not involve transfer of the right to use the machinery in favour of contractors and that determined the issue. 27. It may be mentioned that during the relevant period (1988) no service tax was enforced. It was in 1994 that service tax was levied for the first time as per Chapter V of the Finance Act, 1994. Section 66 thereof created charge of service tax in regard to taxable services. "Service Tax" is defined in clause (34) of Section 65 to mean tax chargeable under the provisions of that chapter. "Taxable Service" is defined [under sub-clause (b) of clause (41) of Section 65] to mean any service provided to, inter alia, a subscriber by the telegraph authority in relation to a telephone connection. No provision of the U.R Act or the said Finance Act, 1994 or the Constitution of India is brought to our notice to hold that rentals collected by DoT from the subscriber cannot be subjected to tax as is done under the U.P. Act. Merely because service tax is imposed by Parliament under the said Finance Act in respect of telephone connection to a subscriber, is no ground to hold that the State cannot levy tax under the U.R Act. 28. Merely because service tax is imposed by Parliament under the said Finance Act in respect of telephone connection to a subscriber, is no ground to hold that the State cannot levy tax under the U.R Act. 28. For the aforementioned reasons, we hold that providing telephone service by DoT which comprises allotment of number, installation of an instrument/apparatus and other appliances at the premises of a subscriber, which are connected with a telephone 2 line to the area exchange to enable him to have access to the whole system, to dial and to receive calls, in effect falls within the meaning of the extended definition of "sale" viz. within the meaning of the "the transfer of the right to use any goods" and the fact that it is described as service under the ITA, 1885 and the 2 Rules made thereunder or under the Finance Act, 1994 would not militate against the same being a "sale" within the meaning of the U.R Act." 18. The three Judge Bench of the Supreme Court in the recent judgment delivered on March 2, 2006 in the case of Bharat Sanchar Nigam Limited and another v. Union of India and ors., 2006 (145) STC 91 was principally concerned with the question as to whether the transaction by which mobile phone connection is enjoyed, is a 'sale' or it is 'service' or both. The Supreme Court held that "Goods" do not include electromagnetic Waves or radio frequencies for the purpose of Article 366(29A)(d) of the : Constitution of India. 19. Dr. AR. The Supreme Court held that "Goods" do not include electromagnetic Waves or radio frequencies for the purpose of Article 366(29A)(d) of the : Constitution of India. 19. Dr. AR. Lakshmanan, J. who delivered the separate judgment in the case of Bharat Sanchar Nigam Limited (supra) held that to constitute a transaction for the transfer of the right to use the goods, the transaction must have the following attributes : (a) There must be goods available for delivery; (b) There must be a consensus ad idem as to the identity of the goods; (c) The transferee should have a legal right to use the goods-consequently all legal consequences of such use including any permissions or licenses required therefor should be available to the transferee; (d) For the period during which the transferee has such legal right, it has to be the exclusion to the transferor-this is the necessary concomitant of the plain language of the statue-viz., a "transfer of the right to use" and not merely a license to use the goods; (e) Having transferred the right to use the goods during the period for which it is to be transferred, the owner cannot again transfer the same rights to others." 20. The question now to be seen by us in the backdrop of the aforesaid legal position is : Is the installation of meter at the place of consumer by the Board and the receipt of hiring charges for such meter, a transaction amounting to the transfer of right to use such meter by the consumer and thereby covered by the definition of 'sale' under the Acts of 1954 and 1994? 21. The format of the application prescribed under the General Conditions of Supply shows that the consumer may require the Board to supply him necessary meter on hire for measuring the quantity of electrical energy. The consumer is solely responsible for any loss or damage to the Board's meter and has to compensate the Board for any damage and cost to the meter. The consumer is liable to pay rental charges every month till the expiry of contract. Save and except that the meter so installed at the premises of the consumer may enable him to know the electricity consumed by him, the consumer as a matter of fact has no right in the meter installed by the Board. The consumer is liable to pay rental charges every month till the expiry of contract. Save and except that the meter so installed at the premises of the consumer may enable him to know the electricity consumed by him, the consumer as a matter of fact has no right in the meter installed by the Board. The installation of meter enables the Board to accurately know the amount of energy supplied by the Board to the consumer. Strictly speaking, there is no right to use that has been transferred by the Board to the consumer by installation of such meter. In any case, such right to use is not to the exclusion of the Board as it is the Board that continues to have the usage of the meter to find out the energy supplied to the consumer as meter reader is sent by the Board. The very nature of transaction between the Board and the consumer of installation of meter would show that the effective control over the meter continues of that of the Board. Though the meter is installed at the premises of the consumer, he is not free to make use of the meter as he likes. The transaction, seen thus, in our considered opinion does not involve the transfer of right to use the meter in favour of the consumer. 22. The view of the Rajasthan Taxation Tribunal is in consonance with the legal position. 23. Consequently, the impugned order does not call for any interference. The writ petition is liable to be dismissed and is dismissed with no order as to costs.Writ Petition dismissed. *******