1998 (1) TMI 471 - SC - VAT and Sales Tax

Whether the company fell within the definition of dealer ? Held that - Appeal allowed. In the present case despite the remand ordered by the High Court earlier the Revenue failed to bring on record facts which would justify the conclusion that the company is a dealer. It could not have been unaware of the onus that it was required to discharge but it failed to do so. Even so we are persuaded to remand the matter to the Tribunal so that the Revenue may have a last opportunity to produce such facts as are requisite to support its case. The company would of course also be entitled to lead such evidence as it thinks necessary to counter the Revenue s case.

Summary

Issues:
Assessment of company as a dealer under Central Sales Tax Act for sales made outside Kerala.

Analysis:
The Supreme Court dealt with the issue of whether the assessee-company should be assessed as a dealer under the Central Sales Tax Act for sales made outside Kerala. The assessing authority initially assessed the company as a dealer, a decision upheld by the Appellate Assistant Commissioner. However, the Sales Tax Tribunal reversed this view, stating that there was no evidence to establish that the company was engaged in the purchase and sale of rubber. The Tribunal emphasized the lack of findings by the assessing authority regarding the company's actual business activities. The High Court remanded the matter to the Tribunal to ascertain the company's intentions and relevant facts. Upon remand, the Tribunal found that the company fell within the definition of a dealer under the amended provisions of the CST Act, considering the company's transactions and registration under the Act. The High Court, in a brief judgment, affirmed the Tribunal's decision, stating that the company's inter-State sales of rubber constituted dealer activities.

The Supreme Court referred to a previous judgment involving a company engaged in similar activities, emphasizing the importance of establishing the intention behind the company's formation and its selling organization. Despite the earlier remand by the High Court, the Revenue failed to provide sufficient evidence to justify the company's classification as a dealer. The Court noted that the Revenue had not met its burden of proof and decided to remand the matter to the Tribunal to allow the Revenue to present additional facts supporting its case. The company was granted the opportunity to counter the Revenue's evidence as well.

In conclusion, the Supreme Court allowed the appeals, setting aside the previous order, and remanded the matters to the Sales Tax Appellate Tribunal for fresh disposal. The Court emphasized that both parties should have the chance to present necessary evidence during the proceedings. Additionally, other appeals and a transfer petition mentioned in the judgment were disposed of accordingly.