SALES TAX AND RIGHT TO USE GOODS

The Allahabad High Court has held that a contract for transportation of passengers, where the contractor uses its own vehicles, operates staff like drivers and conductors and bears all running expenses, would not be liable to sales tax as a transfer of the right to use goods since at no point in time is control and possession in the vehicles transferred to the contractee. The assessee contended that the possession of the buses was never given to any party at any point of time and the control over buses was always with them. The High Court accepted the arguments of the assessee.