THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION Nos.17535, 17537 and 17554 of 2008 July 25, 2011 Between: N.Jagga Reddy, S/o.N.Malla Reddy …Petitioner AND The State of Andhra Pradesh, represented by its Special Chief Secretary, Revenue Department, Hyderabad, And others. …Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION Nos.17535, 17537 and 17554 of 2008 COMMON ORDER: (Per Hon’ble Sri Justice V.V.S.Rao) As the issue involved in these writ petitions is similar, it is expedient to dispose of these matters by a common order. The petitioner is the owner of buses bearing Nos.AP-15V-1266, AP-15W-9602 and AP-15U-6657. He entered into an agreement with the Andhra Pradesh State Road Transport Corporation (APSRTC) for the purpose of hiring the buses to ply on notified routes covered by draft schemes. The second respondent issued separate orders on 15.06.2007 levying Value Added Tax (VAT) under the Andhra Pradesh Value Added Tax Act, 2005 (VAT Act) on the hire charges for the year 2005-2006. In these writ petitions, the orders are separately assailed. The petitioner contends that, as per the agreement between the owner and the APSRTC, it is they who are under an obligation to engage a driver, and to pay wages as per the Minimum Wages Act, 1948; control over the driver, and the bus, are retained with the owner; and it is the owner who is responsible for all violations under the Motor Vehicles Act, 1988 and the rules framed thereunder. Therefore, there is no transfer of the “right to use the goods” warranting levy of tax under Section 4(8) of the VAT Act. In that view of the matter, the petitioner would contend that the second respondent had exercised jurisdiction which did not inhere in him. It is also the contention of the petitioner that, as per Section 4(8) of the VAT Act, the charge is on “the transfer of the right to use goods”, but the bus “owned by the petitioner” does not come within the ambit of “goods”. Learned counsel for the petitioner has reiterated the petitioner’s position. After giving due consideration, none of the submissions can be countenanced by this Court. First a similar issue has been considered by the Punjab and Haryana High Court in Mathura Dass v. State of Punjab[1], and the Orissa High Court in State of Orissa v. Santhosh Kumar[2]. Referring to these judgments in an unreported judgment in M/s.G.S.Lamba and sons v. Sales Tax Appellate Tribunal, Hyderabad[3], we have laid down various principles which are applicable while examining whether there is transfer of the right to use goods or not. These principles are again reiterated in an unreported judgment in M/s.Viceroy Hotels Limited v. the Commercial Tax Officer, General Bazar Circle, Hyderabad[4]. It is well settled that lease of the goods and rentals, pursuant to an agreement between the owner and the lessee, would amount to transfer of the right to use goods which is a deemed sale within the meaning of Article 366(29-A)(d) of the Constitution of India read with Section 4(8) of the VAT Act. The submission that the buses do not come within the ambit of Section 4(8) of the VAT Act is one which is to be noticed for the purpose of rejection. Section 2(16) of the VAT Act has a main definition, an inclusive definition as well as an exclusive definition. The buses do not fall within the exclusionary clause, but fall within the main definition as well as the inclusive definition. The other submission of the counsel for the petitioner is that the petitioner, not being a dealer, cannot be burdened with VAT. This submission is misconceived. Section 2(10) of the Act defines a dealer to mean any person who carries on the business of buying, selling, supplying or distributing goods, or delivering the goods on hire purchase or on any system of premium of installments of sale. A sale, within the meaning of Section 2(28) of the VAT Act, includes every transfer of property in goods and, as per Explanation IV thereto, a transfer of the right to use goods shall be deemed to be a sale. Secondly, Section 4(1) of the VAT Act levies tax not only on the dealer as registered under the VAT Act, but also a dealer liable to be registered under the VAT Act. Merely because a businessman on his own volition does not take necessary steps for registering himself or herself as a dealer, it does not mean that the assessing authority is denuded of the power to levy VAT if the transaction comes within the meaning of sale or deemed sale as per the definition under the VAT Act. These writ petitions are misconceived and are, accordingly, dismissed. There shall be no order as to costs. ________________ (V.V.S. RAO, J) _____________________________ RAMESH RANGANATHAN, J July 25, 2011 YS [1] AIR 2003 P H 59 [2] (1983) 54 STC 322 [3] T.REV.C.No.154 of 2010 and batch, Dated 28.01.2011 [4] W.P.No.17092 of 2010, Dated 23.02.2011