2009 (4) TMI 836 - HC - VAT and Sales Tax

Whether the Tribunal is justified in allowing the S.T.A. without giving any reasons ? Held that - It is manifestly clear that the movement of the goods as alleged by the assessee, from Tamil Nadu to other States has not been established. In the absence of any materials to establish the movement of goods from Tamil Nadu to other States, the one and only recourse available to the assessing officer is to treat those quantity of the goods as sales within the State of Tamil Nadu but failed to bring it on account by the assessee bring the same on account. Hence, the turn over for ₹ 33,95,980/- was brought to tax with other components of tax and for the action of the respondent to filing an incomplete and incorrect return, penalty provision has been invoked under Section 12(3)(b) of the Tamil Nadu General Sales Tax Act and penalty has been levied by the assessing officer which has been restored by the Tribunal. Hence, we find no merit in the revision.

Summary

Issues:
Assessment of consignment sales turnover under Tamil Nadu General Sales Tax Act, 1959 and imposition of penalty for incomplete and incorrect filing of returns.

Detailed Analysis:

Issue 1: Assessment of consignment sales turnover
The assessee, a dealer in pulses and grams, claimed exemption of Rs.33,95,980/- as consignment sales turnover for the assessment year 1993-94. However, upon inspection by Enforcement Wing Officials, it was found that there was no movement of goods from Madras to other States as claimed by the assessee. The assessing officer treated the transactions as intra-state sales under the Tamil Nadu General Sales Tax Act, 1959, and imposed penalties for incomplete and incorrect filing of returns. The Appellate Assistant Commissioner initially allowed the appeal based on documents provided by the assessee, such as consignment sale agreements and lorry receipts. However, the Tamil Nadu Sales Tax Appellate Tribunal noted that the lorry transport owners denied issuing the receipts relied upon by the assessee, casting doubt on the movement of goods to other States. The Tribunal concluded that the assessee failed to establish the movement of goods from Tamil Nadu to other States, leading to the turnover being taxed under the state's jurisdiction.

Issue 2: Imposition of penalty
In addition to assessing the consignment sales turnover, the assessing officer invoked penalty provisions under Section 12(3)(b) of the Tamil Nadu General Sales Tax Act for the incomplete and incorrect filing of returns. The penalty imposed was later restored by the Tribunal, affirming the assessing officer's decision. The Tribunal's stance was based on the lack of evidence to substantiate the movement of goods as claimed by the assessee. Consequently, the High Court found no merit in the revision filed by the assessee and dismissed it, upholding the assessment of turnover and imposition of penalties.

In conclusion, the High Court upheld the decision of the Tamil Nadu Sales Tax Appellate Tribunal, emphasizing the importance of substantiating claims of consignment sales and adhering to proper filing procedures to avoid penalties under the relevant tax laws.