1973 (7) TMI 98 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of taxable turnover under the Madras General Sales Tax Act for the year 1962-63, determination of turnover as inter-State or intra-State sales, availability of contracts for disputed transactions, consideration of documents like invoices and C forms, assessment of disputed turnover under the Central Sales Tax Act.

Analysis:
For the assessment year 1962-63, the assessees initially reported a taxable turnover under the Madras General Sales Tax Act, which was later revised by the assessing authority. The disputed turnover amounting to Rs. 2,54,383.28 was claimed by the assessees to be inter-State sales, not intra-State sales as determined by the authorities. The Tribunal, after examining the available documents, concluded that the turnover indeed represented inter-State sales, leading to the appeal by the State challenging this decision (Revenue vs. Assessees).

The revenue contended that the transactions were intra-State sales, emphasizing the lack of concrete evidence such as contracts directly with out-of-State buyers. The absence of these contracts raised doubts regarding the nature of the transactions, specifically regarding the movement of goods from the State to Calcutta. The revenue argued that the goods were sold to a local dealer, who then facilitated the transport to Calcutta, suggesting two separate sales transactions.

The Court noted the significance of available documents like invoices, correspondence, and C forms from out-of-State buyers in determining the nature of the transactions. Despite the unavailability of actual contracts, these documents indicated that the movement of goods was part of the sale agreement. The Court emphasized that the burden of proof was on the assessees to establish inter-State sales, and the documents presented supported this claim, especially the C forms issued by out-of-State buyers.

The Court rejected the revenue's argument that the goods were sold to a local dealer, who then resold them to out-of-State buyers, citing insufficient evidence to prove this theory. The Court upheld the Tribunal's decision that the disputed turnover represented inter-State sales. Subsequently, the Court addressed the tax implications, agreeing that the turnover should be assessed under the Central Sales Tax Act since it was determined to be inter-State sales, dismissing the tax case and granting liberty to the revenue for assessment under the Central Sales Tax Act.

In conclusion, the Court affirmed the Tribunal's finding that the disputed turnover constituted inter-State sales based on the available documents and upheld the assessment under the Central Sales Tax Act, dismissing the tax case with no costs awarded.