In Brief
Great Eastern Shipping Company hired out a tug vessel to a Port Trust via a Charter Party Agreement and challenged a sales tax notice. The Supreme Court held that the charter agreement constituted a 'deemed sale' of goods under the Constitution because it transferred exclusive right to use the vessel for a fixed period with full control and delivery, making it liable to Karnataka sales tax. The Court rejected the argument that all charter parties are mere service agreements, stating each transaction's characterization depends on its actual terms. The Court also clarified that mere location of goods within a State cannot be grounds for tax if the transfer occurred elsewhere. The appeal was dismissed.
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