In Brief
The Supreme Court held that contracts for supplying vehicles, cranes, and tankers with operational crew, maintenance, and full liability retained by the supplier do not constitute a transfer of the right to use goods under India's VAT and Sales Tax laws. Applying the five-part 'Panch Ratna Test' from BSNL v. Union, the Court found that the supplier's retention of effective control, responsibility for staff, fuel, insurance, and legal consequences meant no transfer of substantive control occurred. Therefore, these transactions qualify as taxable services under the Finance Act, not as sales subject to VAT or Sales Tax. The Union of India was permitted to pursue service tax recovery.
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