- (1.) The assessee has filed the present Appeals by special leave.
(2.) The assessee is a financier, providing finance to the customers who wish to purchase of goods, such as equipments, machinery, vehicles, etc., both from within Kerla and from outside the State of Kerala, and delivery of the goods in the State of Kerala, under hire purchase agreement executed between the assessee and the customers/parties.
(3.) The modus operandi followed by the assessee is as under: The intending customers would approach the supplier for purchasing equipment, machinery, etc. and obtain a proforma invoice from the supplier for the purchase of the goods. The customers then approach the assessee with an application in the prescribed form, stating the amount required to be financed for purchase of goods and enclosing therewith the proforma invoice obtained by the customer from the supplier. The assessee after being satisfied itself about the bona fides and credit worthiness of the customers, sanctions the amount of advance. Upon the terms of financing, viz., the extent of finance, rate of interest, period of hire purchase, etc. being settled between the assessee and the customers in Kerala, hire purchase agreement is executed. Under the Agreement, the purchase order is placed by the assessee to the supplier outside Kerala, directing the supplier to deliver the goods to the customer in Kerala. The invoice is raised in the name of the assessee and the payment thereof is made by the assessee to the supplier. The assessee thus retains the title of the goods until the last instalment under the Hire Purchase Agreement is paid by the customer. The customer pays to the assessee the amount borrowed in instalments as agreed upon and on payment of the last instalment, the goods become the property of the customer. The ownership is transferred to the customer thereafter. In case of breach in payment of instalment under the agreement, the assessee was free to take back the possession of the goods and deal with it in the manner it likes.;