AIR 1966 SUPREME COURT 1178 ::1966 Ker LJ 408 ::1966 (17) STC 489 ::1966 2 SCR 828 ::1966 (1) SCWR 753 ::1966 2 SCWR 206

Supreme Court Of India

(From Kerala: ILR (1964) 1 Ker 324)

Hon'ble Judge(s): K. Subba Rao, J. C. Shah, S. M. Sikri , JJJ

Travancore Cochin General Sales Tax Act (11 of 1125) , S.2(f)— Sales Tax - Hire-purchase agreement - Customer, with a view to finance his purchase, entering into arrangement in the form of hire-purchase agreement with financier - Construction - @page-SC1179Transaction whether of sale or of loan-Held on construction of documents that transaction was one of loan and not of sale and so not exigible to sales tax.ILR (1964) 1 Ker 874, Reversed.ILR (1964) 1 Ker 874, Reversed. Sale of Goods Act (3 of 1930) , S.4— Contract Act (9 of 1872) , S.10— A hire-purchase agreement is normally one under which an owner hires goods to another party called the hirer and further agrees that the hirer shall have an option to purchase the chattel when he has paid a certain sum, or when the hire-rental payments have reached the hire-purchase price stipulated in the agreement. But there are variations when a financier is interposed between the owner of the goods and the customer. The agreement, ignoring, variations of detail, broadly takes one or the other of two forms: (1) when the owner is unwilling to look to the purchaser of goods to recover the balance of the price, and the financier who pays the balance undertakes the recovery. In this form, goods are purchased by the financier from the dealer, and the financier obtains a hire-purchase agreement from the customer....